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iPad and other gadgets drain Asia of electronic components

Apple goes low-tech to solve iPhone woes
New York (AFP) July 18, 2010 - Seeking to quell the fuss over reception on the new iPhone, Apple is applying a low-tech solution to a high-tech problem. The California gadget-maker is hoping a 29-dollar rubber-and-plastic case will put an end to the debate over the antenna on what Apple chief executive Steve Jobs calls "perhaps the best product we've ever made." The bumper, which fits around the sides of the phone, will be offered free to all buyers of the iPhone 4 through the end of September, and customers who have already purchased the case will be reimbursed. Abhey Lamba of the International Strategy and Investment Group said the financial impact of the expense would be "fairly insignificant" to the company behind the Macintosh computer, iPod, iPhone and the iPad.

"Assuming the cost of distributing a bumper to be about five dollars per unit and the number of bumpers as 10 million, total cost to the company could be about 50 million dollars," Lamba said. Noting that Apple has sold more than three million iPhones in just three weeks, Lamba also said "clearly, the antenna issue has not made any dent in demand for the new phone." "We expect the strong momentum to continue," said said, estimating that Apple will sell 37 million iPhones in fiscal 2010 and 44 million in fiscal 2011.

The iPhone 4 has been bedeviled with complaints about dropped calls from the moment it appeared on store shelves three weeks ago. Some iPhone 4 users claimed they lost reception when holding the lower left corner of the phone -- whose unusual antenna wraps completely around the device -- in what has been referred to as the "death grip." Consumer Reports, the influential product review magazine, said it could not recommend the device because of the problem, forcing Jobs to cut short his Hawaii vacation and return to San Francisco to address the controversy. The Apple chief said the whole issue had been "blown so out of proportion" but apologized to any customers who experienced problems and offered the free cases as a fix.

"A lot of people have told us the bumper solves the signal strength problem," Jobs said at an event held at Apple headquarters to address "Antennagate." "OK, so let's give everybody a free case." Jobs acknowledged "there's a problem" but stressed "it's affecting a small percentage of users and some of that problem is inherent in every smartphone." "We're not perfect," he said. "Phones aren't perfect either." Jobs acknowledged the iPhone 4 drops slightly more calls than the previous model, the iPhone 3GS, but said said other smartphones also drop reception if held in a certain way.

"It's certainly not unique to the iPhone 4," he said. "Every smartphone has this issue." Gartner analyst Charles Smulders said problems such as those experienced by Apple are to be expected by firms operating on the cutting-edge. "There are inherent risks when any company pushes the design and technology envelopes," Smulders said. "Apple pushes very hard on both fronts." "I don't think they've had a lot of serious product issues over the years," said Mike McGuire, another Gartner analyst, adding that he expects the issue to blow over. "From a consumer perspective, they've now told me how this is going to be dealt with," he said. "And they even said if I'm really still unhappy, I can return it. "You can't ask for much more than that."
by Staff Writers
Taipei (AFP) July 18, 2010
The launch this year of must-have gadgets such as the iPad, the iPhone 4 and a host of other smartphones, tablet computers and 3D televisions is draining the Asian market dry of electronic components.

An iPad is sold on average every 2.3 seconds, with three million sold in the first 80 days after its launch in the US in April. Three million iPhone 4 smartphones were also sold in only three weeks since its June release.

The increase in demand has made this a hot summer so far for Taiwanese touchscreen maker Wintek, and not just because temperatures have risen to abnormally high levels.

Located in the central Taiwanese city of Taichung, the company has struggled to keep up with insatiable demand for its high-tech components.

"The strong demand exceeds our expectations," said a Wintek official, speaking on condition of anonymity. "Our clients keep pushing us to increase supplies."

Wintek, whose customers reportedly include global brands such as Apple of the United States, Finland's Nokia and South Korea's LG, said the component shortage surfaced in the second quarter of the year.

Apart from a gradual global recovery, one of the triggers for the sudden spike in demand for components has been the launch of several much-anticipated products, especially the iPad tablet computer from Apple.

For many products, the lead time -- the period from when a customer orders an item until he gets it -- has expanded significantly beyond the usual 10 to 12 weeks, according to iSuppli, an electronics industry research firm.

"When lead times enter the 20-week range, they indicate a major schism between component supply and demand," said Rick Pierson, a senior analyst for semiconductors and component price tracking at iSuppli.

Matthew Chao, an analyst at Taiwan's Industrial Technology Research Institute, said the iPad would continue to send ripple effects through the industry, causing demand to rise further.

For instance, HP and Acer are planning to unveil their own tablet computers in the third and fourth quarters, which will further boost demand for components, he said.

"The market for smartphones and tablet computers is looking very bullish, especially since the fourth quarter is the traditional high season for the holidays," he said.

South Korean firms say they are struggling to acquire components due to shortages caused by strong demand, although they insist there have been no serious delays yet in overall production and shipments.

Samsung Electronics and Hynix Semiconductor, the world's largest and second-largest computer microchip makers, have boosted capital outlays to meet rising global demand.

Factories for Samsung and LG, which produce gadgets including mobile phones and flat panel screens, are running flat out.

"Our plants are now running at full capacity due to strong demand and brisk sales," a Samsung spokesman said.

Yet Samsung's production of memory chips meets only 70 percent of total international demand and its output of 3D televisions covers 80 percent of demand, he said.

Samsung is experiencing a shortage of touchscreen panels for mobile phones although this is not serious enough to delay production and shipments, he said.

"Spending on facilities has been boosted, but we expect the shortage of components to get worse because of unexpectedly strong demand," the spokesman said.

Regionwide in Asia, producers of components are likely to launch ambitious expansion plans, analysts believe.

"Component makers for these products will keep expanding their output to meet growing demand," said Chao of the Taiwanese industrial research institute.

Taiwan's Wintek is currently expanding its production lines in the Chinese cities of Dongguan and Suzhou to catch up with the demand, adding a healthy 1.6 million touchscreens to the monthly supply.

The component makers may need all the extra capacity they can get as touch panel screens within the PC market is expected to grow rapidly in the coming years.

"Market estimates (show) that the tablet PC will form almost a quarter of the global PC market by 2015," said Satish Lele, an analyst at consulting firm Frost and Sullivan.


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Jobs says iPhone issues overblown, offers free cases
San Francisco (AFP) July 16, 2010
Apple chief executive Steve Jobs said Friday that reception problems with the new iPhone 4 had been overblown but apologized to buyers who experienced issues and offered free cases as a fix. Jobs, speaking at a press conference for a select group of journalists at Apple headquarters, said other smartphones have antenna problems similar to those reported with the latest iPhone model. "We' ... read more

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