It’s a Mistake to Declare Apple Supply Chain Rumors of Problems a Disaster

| Analysis

The Mac web is good at picking up on supply chain rumors about problems that Apple may be having with manufacturing. That's often interesting reading, but where we can get into trouble is the conclusions that are drawn.

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When I read about issues Apple may be having with its production of sapphire, problems with the case or display or battery production problems, I assume that Apple is able to bring its own engineering and manufacturing expertise along with that of the supplier to bear.

Perhaps I feel that way because I worked for Lockheed Martin for so many years, and I saw my own teams as well as others come up with imaginative and clever solutions to fabrication issues. A problem is just that, something to be solved. Smart people usually end up solving minor (and often major) manufacturing issues.

There is also the issue of risk assessment. In any high technology arena, there are straightforward issues and high risk issues. If a particular technology that's being developed is deemed high risk, multiple suppliers may be lined up. If one fails, another is asked to step in. That's what appears to have happened with iPhone 6 batteries. That may be a rumor, but the fact is that conservative manufacturing approaches always have good planning that prepares for contingencies.

The wrong way to construe these rumors of difficulties is to reel back in horror and declare that Apple is doomed. Every reported problem is declared unsolvable (from a distance, no less) and rash conclusions are made, often with an unwarranted assertion that Apple won't be able to ship as expected.

For example, we may hear that AT&T has told certain employees not to take a vacation in the last two weeks of September, and so we guess that an iPhone model may be released then. But when a production issue comes to light, the often unwarranted conclusion is that Apple will miss its target date. All is lost.

In the end, the trick is not to dismiss rumors and say we can know nothing, nor to read too much into rumors so as to construct lurid headlines of looming failure. Rather, the trick is to put rumors into perspective and size up whether some rumored problem is really as bad as it sounds given the sophistication and experience Apple has with manufacturing.

After all, for Apple and its manufacturing partners, the iPhone 6 is hardly their first rodeo.

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Comments

Paul Goodwin

I would love to see some Apple Risk and Mitigation assessment charts We did some pretty complex ones at GE. I’d be shocked if there was a show stopper.

ibuck

The wrong way to construe these rumors of difficulties is to reel back in horror and declare that Apple is doomed. Every reported problem is declared unsolvable (from a distance, no less) and rash conclusions are made . . .

Isn’t this the very template for 90% of the reporting about Apple?

Blissmonkey

Methinks it was the retina iPad Mini when Apple explained there may be a shortage of goods due to supply chain problems.  The end result was a ramping up of desirability for an otherwise so-called rare product, similar to the gold iPhone.

Supply chain issue leaks serve this one single purpose, which is the exact opposite of the doom of Apple: it promises to even further fatten their coffers while increasing the lust-factor of the overall brand.

Vasant

We’re talking about devices that require unreal tolerances. We’re also talking about making tens of millions of these devices. The task is to produce tens of millions of devices with some extremely tight tolerances. It’s perfectly likely that there will be problems in making these devices. Apple, like any good company, deals with the problem.

Mike Weasner

I always suspect rumors of problems with products that are themselves rumors.  I don’t think Apple has announced any new iPhone (or wearable or iPad 12”). Stock speculators are the ones who initially publish rumors (good or bad) about rumored products. Speculators (or “rumormongers”, if you prefer) should be held accountable for the rumors onto of rumors that they publish.  Yes, it is fun to watch this Apple vs speculators game. Just don’t bet too much on the speculators.

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