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Apple’s iPad Production Slowed by Retina Display Supply and ‘Sound Labor Practices’

Apple’s iPad Production Slowed by Retina Display Supply and ‘Sound Labor Practices’

Demand for Apple’s new iPad remains strong, however production of the device has been limited by the supply of Retina displays, and the new “sound labor practices” at Foxconn which has resulted in worker hours being cut.

AppleInsider:

Analyst Shaw Wu with Sterne Agee aimed to quash some investor concern on Wednesday that demand for the new iPad is waning. That’s not true, he said, as his checks within Apple’s supply chain have found that the company continues to have strong interest in its latest touchscreen tablet.

Wu said that instead, it’s the supply of the new high-resolution Retina display that has limited the output of the newest model of the iPad. He expects that situation to improve, as additional production lines and suppliers come online.

Samsung is currently thought to be the primary supplier for the displays, while LG and Sharp have struggled with the manufacturing of the screens, but have recently began making small volume shipments.

Wu said another factor is that Foxconn is now “conforming to more sound labor practices.” Last month, Apple’s manufacturing partner agreed to fix a number of violations, including excess overtime by its employees.

“This is in an effort to improve working conditions,” Wu said. “From our understanding, the irony is that many employees prefer to work more overtime.”

Because iPad production has apparently been slowed by factors other than demand, Wu raised his estimates for sales in the current quarter. He now sees Apple having sold 12.3 million iPads in the already-concluded March quarter, up from his previous forecast of 11.5 million.