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iPad 2 Shortages Due To Display and Speaker Production Issues?

Following Apple’s Q2 2011 financial results and the number of iPad 2 sales in the quarter  lower than expected by Wall Street analysts at 4.6 million units, speculation has arisen as to whether or not Apple had to face shortages due to Japan’s earthquake and tsunami that affected production of key components for the tablet. While Apple COO Tim Cook assured that they’re making as many iPads as they can with no “supply or cost impact in fiscal Q2 in result of the tragedy”, a new report by IHS’ iSuppli sheds some light on the actual production issues that determined the shortage of iPad 2s in the first quarter of 2011.

The report notes how “quality concerns” over LCD screens might have affected Apple’s estimated number of iPads to ship during the quarter, together with “production shortages” with the redesigned speaker that Apple implemented in the second-generation device. iSuppli also mentions “lamination issues with one of the touch suppliers” and “shortfalls” in the end-unit production.

While Apple is now on track to significantly increase its production volume in the second quarter,” according to the Thursday’s iSuppli News Flash, “the company reportedly is still falling substantially short of its target production goal for April.”

As a result, iSupply has lowered its 2011 iPad shipment forecast to 39.7 million from the 43.7 million forecast in February.

At the earnings call, Tim Cook said demand for the iPad 2 was “staggering” and the company was “amazed” with the results. However, he also went on to say they were “heavily backlogged” at the end of the quarter, later calling the iPad 2’s production the “mother of all backlogs” with Apple working as fast they possibly could to get the device in the hands of consumers. Earlier reports of Apple willing to pay more to suppliers to ensure a steady flow of components and executives visiting Japan soon after the tragedy to sign pre-payment deals suggested the company was focused on avoiding possible delays and shortages, although iSuppli hints at LCD and speaker issues as the cause of lower shipments in the first quarter.

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