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Mac Corner

iPad2 and other devices may be in short supply

By Larry Grinnell, Palm Beach Phoenix Apple Users Group

larry grinnell

The recent tragedies in Japan have a far-reaching impact on the consumer electronics industry, among others. Most high resolution LCDs are made in Japan, and that is where the LCDs used in the iPad and iPad2 are manufactured.

The plants were reported to be within 50-100 miles of the worst hit area, and may be off-line for some time. Apple supply chain folks are scrambling to locate alternate sources to help tide them over.

This could result in a double-whammy for Japan as it recovers from the recent earthquakes and tsunamis. As Apple and other companies seek alternate suppliers, you can bet your bottom dollar that they will be offering better pricing, and at least for the timeframe in which these panels and other components are qualified, they will be of the utmost in quality.

Whether those levels of pricing and quality can be sustained is the $64 million dollar (inflation) question. If suppliers in South Korea, China, Taiwan, etc. can indeed sustain low price and high quality levels, it’s quite possible that Japanese companies could lose that business forever.

Expect to see higher prices and reduced availability of memory devices, both RAM and flash. Many of these devices come from Japan, though Korea seems to dominate in flash memory. Apple and other manufacturers are likely to hit up their suppliers in Korea to step up production to make up for the reduced number of components coming out of Japan for the immediate future.

This, again, could spell trouble for Japanese suppliers who could be pushed aside by lower cost yet high quality suppliers elsewhere in the Pacific Rim. These countries are hungry for more business, and they could easily prosper even more at Japan’s expense, which could result in a slower recovery and an extended financial crisis.

Just when the price for solid state drives (SSD) have begun to drop, reduced supplies could cause the dropping prices to reverse, making these interesting and speedy devices more, or maybe much more expensive.

One recent anecdote that came across my desk is how at least one South Florida AT&T store has put a $400+ premium (over retail price) on iPad2 sales, “blaming” current product shortages. This brings to mind how dealers of highly popular automobile brands continue to add a second sticker next to the “official” factory-issued sticker with cryptic acronyms like ADP and LMA (among others), which stand for, respectively, “additional dealer profit,” and “local market adjustment.”

Their rationale is that if they can discount heavily to move slow-selling inventory, why can’t they boost prices on popular models in short supply? After all, the sticker is only the manufacturer’s suggested retail price, and any interference by the manufacturer with their retailers could be construed as price fixing or other nasty words, so the most manufacturers can do directly is ask their retailers to lighten up and sell at full list without a discount.

It makes the manufacturer look just as bad as the retailer when they sell product at higher than list price. In the case of most AT&T stores, they are franchises and not company-owned, so Ma Bell has very little to say about how their franchisees charge for product.

Next week’s column will be a very special one, so stay tuned.

Mac Corner runs every Wednesday only in Palm Beach Click to read the previous column.

About Larry Grinnell: Larry has been working with Macintosh and Windows PCs for over 25 years and worked as a senior technical writer and IT support professional for a major midwest-based consumer electronics and telecommunications equipment manufacturer here in South Florida. His musings on a wide variety of topics from computers to jazz guitar to strange foreign cars from the 1950s can be viewed at the website. Click here to reach him by email.

palm beach phoenix logoWriters of this column are members of the Palm Beach Phoenix Apple User Group, a nonprofit organization for Apple Computing Device Users, recognized by Apple Inc., with the purpose of providing educational training and coaching to its members (students, professionals and seniors alike) in a cordial social environment. The club meets the second Saturday (1-4 p.m.) and fourth Wednesday (6-8 p.m.) of each month at the Fire Station #2, 4301 Dixie Highway in West Palm Beach (just two block south of Southern Boulevard). Click here to visit their website. Click here to reach them by email.

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MARCH 23, 2011 click to go home
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