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Despite the news of a potential delay in the release of the Apple Watch 7 due to the highlighted production complexities, the company’s shares are seeing a renewed growth.
American multinational technology company, Apple Inc (NASDAQ: AAPL) is reportedly facing production challenges for its new Apple Watch series scheduled to launch in the coming weeks. As reported by Nikkei Asia, the complications came up as a result of the complexity in the design for the new devices, stalling the massive production ahead of the proposed launch.
Apple is known to introduce new products in September and October every year. Prior to the scheduled launch, the company always perfects its production lines, to ensure the product supply will meet the often anticipated demand. This year, the company, according to people familiar with the matter, has re-engineered the design of the Apple Watch, and the differences it exhibits in comparison with older models is notably giving the assemblers a hard time in putting together electronics modules, components and displays.
“All assemblers are facing similar problems in reaching satisfactory production performance based on the current industrial designs,” one of the people with direct knowledge of the matter told Nikkei Asia.
The challenge was further highlighted by the limitations placed by the COVID-19 pandemic. In subsequent years, the Apple’s engineers typically travel down to assembly lines to ensure the companies are able to meet the quality and quantity requirement. The travel restrictions have largely prevented these visits, and as such, the inconsistencies were discovered when small scaled production commenced last week.
According to people familiar with the matter, Apple and its partners are working round the clock to resolve these challenges
“Apple and its suppliers are working around the clock trying to solve the issues, but currently it is hard to tell when the mass production could begin,” one of the people added.
AAPL Stock Not Reacting Negatively
AAPL stock closed 0.84% lower on Tuesday with a share price capped at $151.83. Despite the news of a potential delay in the release of the Apple Watch 7 due to the highlighted production complexities, the company’s shares are seeing a renewed growth of 0.47% in the pre-market. This is perhaps due to investor’s confidence in the fact that Apple always rises above the challenges, all to turn out profitable sales.
The Apple Watch are the largest wearables in sales terms that the Cupertino-based company produces. The firm is the world’s biggest smartwatch maker. It shipped about 36 million Apple Watches last year, for an annual growth rate of 39%, according to research company IDC. The total sales reported for the Apple Watch in 2020 came in at $30.62 billion according to a CNBC report.
The current redesigns which will enhance its electrocardiography, sleep tracking and the ability to unlock iPhones while wearing a mask have helped increase the gadget’s popularity. The new version is designed to be water-resistant, and it has the capability to measure the wearer’s blood pressure. The production challenges to be solved will thus involve fitting a greater number of components within the same body size.