Apple iWatch Hurt By Production Problems

1/3/14 11:45AM EST

Apple iWatch Hurt By Production Problems Apple iWatch Hurt By Production Problems

USPTO

2014 is billed to be the year of many things in the tech world, but wearable computers are at the top of most lists. The first entrants into the market, including the ill-fated Samsung Galaxy Gear, arrived in 2013, but the big players re not expected to put their reputations on the line until later this year. Apple Inc. (NASDAQ:AAPL) is the father of the most highly anticipated speculative product, the iWatch, but its delivery may be hampered by production problems.

According to Digitimes.com, Apple Inc. (NASDAQ:AAPL) is facing problems with certain processes used to manufacture the wearable devices. The report says that the Apple iWatch and the Qualcomm Toq have both been hit by a problem “applying surface treatments on their metal injection molded chassis.” Apple fans may have to take back their slating of the Samsung Galaxy Gear yet.

iWatch Production Problems

According to the piece metal injection molding is most often used to manufacture internal components at a high level of precision. Companies are now trying to bring the MIM process to bear on the exterior of their products, and that means the treatment of those parts. The treatments are required to attach other necessary parts of the smartwatch, including the screen, to the chassis.

The production problems are not that unusual for companies delving into an all new product category, but there is not clear indication about the effect of the problems. According to the report yield rates for some of the smartwatches were below 50 percent as a result of problems with the process. There is not promise that Apple Inc. (NASDAQ:AAPL) is actually working on the iWatch, and there are, as always, reasons to doubt the supply chain reports.

Apple iWatch Ambition

The Apple Inc. (NASDAQ:AAPL) iWatch outstripped the full Apple television as the most talked about speculative product at the company. Analysts have been wooed by the promises made by companies like Google Inc (NASDAQ:GOOG), and many of them seem convinced that Apple Inc. (NASDAQ:AAPL) sees the future on the wrist of a tech user. The Cupertino company has, however, made nothing of the sort clear.

If an Apple Inc. (NASDAQ:AAPL) smartwatch does come into existence, there is no consensus on the form that it would take, or the features that it would have baked in. Some analysts see the device as an iPhone add-on, while others see it as a complete replacement for the smartphone, at least for certain users. After the botched release of the Samsung Galaxy Gear, it is clear that the smartwatch will only reach a relatively small group of customers, but that may be all that Apple is looking for.

Apple Inc. (NASDAQ:AAPL) may see 2014 as a time to diversify and expand its ecosystem. The company’s runaway success with the iPhone has not been matched by any other product release, but there may be room for extras and add-ons that continue growth in the company’s profits. Whatever the reasoning behind the iWatch, Apple investors are waiting for a new product. They’ll be happy to see a glimpse of anything in 2014.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.