Apple iPad Mini Rumors: Suppliers Challenged By ‘Frustrating’ Yield Issues, Supply Constraints Likely

With yield issues on the new in-cell touch displays, the iPhone 5 was not an exception. And at a time when Apple is widely rumored to launch its 7.85-inch iPad mini soon, new reports are suggesting that the device could also face supply constraints due to yield issues with several components.

MacRumors cited Topeka Capital Markets analyst Brian White who said Thursday that his industry sources believed that producing the rumored iPad mini in response to rival 7-inch tablets, powered by Google’s Android operating system, was “no walk in the park for suppliers.” Sources said that yield issues with a number of iPad mini components had been “frustrating” for suppliers and that these concerns could create “supply constraints” once the device launches.

“Similar to the iPhone 5, we sensed that suppliers have found the specs around Apple's (AAPL-$671.45: Buy) 7.85-inch ‘iPad Mini’ to be a challenge and yields have been frustrating. In our view, this is the reason the ‘iPad Mini’ is 4-6 weeks behind our original launch expectation that we discussed in June,” White wrote in a note investors.

“Despite continued yield challenges, the supply chain feels the much anticipated iPad Mini is on track to reach acceptable volume levels for a launch over the next month. That said, we believe that supply constraints will initially hold back the full sales potential during the first month or so of the launch,” White added.

According to White, Apple will launch the iPad mini with a price between $250 and $300. He also estimated that the Cupertino tech giant will sell 5–7 million iPad minis in the December quarter, which was below the estimates from other analysts who had predicted the sales figure closer to 10 million.

White also believed that despite the lower price, Apple is expected “to maintain the iconic aesthetics of the current iPad and blow away what competitors are offering in this smaller form-factor tablet market.”

More Similar Claims

A couple of reports Thursday from Digitimes also indicated similar supply issues for the iPad mini.

According to one of its reports, Taiwan-based TFT-LCD panel maker AU Optronics (AUO) shipped 400,000 panels for the iPad mini in the third quarter, which was below expectations due to low yield rates.

The report cited sources saying that “Apple is expected to ship 9-10 million units of the new tablet in the fourth quarter, but it remains to be seen whether AUO and LG Display - the other panel supplier for iPad Mini - can meet the target.”

The same sources also revealed that as many as five million panels for iPad Mini were set for the third quarter, but due to low yield rates, the amount was cut down to one million, with LG Display and AUO comprising 60 percent and 40 percent, respectively.

Another report from Digitimes claimed that chassis manufacturers for the iPad mini were also facing low yield rates, which could hinder shipments of the device. Here’s what the report said:

“Case makers Foxconn Electronics, Catcher Technology and Ri-Teng Computer Accessory are responsible for production of the iPad mini chassis, the sources indicated. Ri-Teng is an associate company of Pegatron… The iPad mini reportedly will come in native- and black-colored aluminum chassis, which are more vulnerable to scratching, said the sources, adding that the anodized finish process on the black cases is more critical, which often results in lower yield rates.”

The Release Date

Fortune reported earlier this week, citing a “major Apple investor,” that the company was set to issue invitations on Oct. 10 for an iPad mini-related media event.

The report said that “if Apple follows its usual scheduling protocol, that would suggest a special event to unveil the product on Wednesday, Oct. 17, with a launch day of Friday Nov. 2.”

Meanwhile, The Wall Street Journal reported Wednesday that mass production of the iPad mini has begun already at Apple's suppliers in China. With the production said to have kicked off, a number of leaked components said to be those of the iPad mini have also surfaced online.

On Thursday, Apple Insider reported that claimed headphone jacks of the iPad mini had appeared on Nowhereelse.fr.

Since the parts were shown in black and white, the report suggested that the device could be available in two colors at the launch.

In addition, a set of other claimed parts of the iPad mini including front and back panels, an LCD display and a nano-SIM tray also surfaced online earlier Tuesday.