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ECommerceTimes.com

Faulty Taptic Engine Could Make Apple Watch Rollout Sputter

By John P. Mello Jr.
May 1, 2015 12:43 PM PT

A production snag in making the component that provides tactile feedback in the Apple Watch could impact its availability in coming weeks.

Apple was having problems obtaining sufficient vibration motors for the component, called the "taptic engine," AppleInsider reported two weeks ago.

Those problems apparently have worsened. Quality control problems with the Chinese maker of the component, AAC Technologies Holdings, have forced Apple to move nearly all manufacturing of the unit to a Japanese company, Nidec, The Wall Street Journal reported Wednesday.

Delays in the availability of the watch could occur as Nidec ramps up production. However, no recall of watches was anticipated, because no watches with a flawed version of the part were shipped to customers, the Journal reported.

Apple did not respond to a request for comment for this story.

Wild Positive Effect

While the taptic problem may slow supplies of the watch, that impact will be short-lived.

"In the long term, this will be a non-event," said Gene Munster, an analyst at Piper Jaffray. "It will probably push back Apple's distribution schedule about a month."

Ironically, if a shortage were to occur, it could have a positive impact on sales.

"There could be some wild positive side effect," Munster told the E-Commerce Times. "People may think demand is greater because lead times are greater."

At the moment, though, those lead times are sinking, not climbing.

"Delivery times have been reduced. People who were supposed to get their watches the last week in May are going to get them in the first or second week of May," said Trip Chowdhry, managing director for equity research at Global Equities Research.

"I don't think consumers will be impacted at all, because the issue has been fixed and deliveries have accelerated," he told the E-Commerce Times.

No Sales Impact

If the taptic problem tightens supply of the Apple Watch, it won't do so for long.

"It will have little impact in the long run," said Tim Bajarin, president of Creative Strategies. "It will just slow down how fast they can meet demand in the first six months."

It's unlikely to impact the popularity of the watch, he added.

"Reviews by people who just got theirs show a high level of acceptance and great experiences, and this will continue to drive strong demand for the Apple Watch across the board," he told the E-Commerce Times.

Apple will sell between 20 million and 22 million watches in the first 12 months they're on the market, Bajarin estimated.

Fans of Apple products have been very tolerant of imperfect products. For example, the iPhone has weathered "Antennagate" -- a glitch that caused the phone to lose reception when it was held in a certain way -- and the Apple Maps fiasco. However, some Apple Watch buyers -- those paying US$10,000 or more for a watch, for instance -- are another breed of consumer.

"I'm wearing a Rolex that's 40 years old, and it works every day," said Michael Morgan, an independent mobile devices analyst.

"That makes the $5,000 paid for it 40 years ago worth it," he told the E-Commerce Times. "People paying that kind of money expect those kinds of results."

Tatoogate Looms

The taptic problem is just the most recent one cropping up since the Apple Watch began shipping. Reports also surfaced that the unit's heart rate monitor didn't work if the skin under the watch was darkly tattooed.

"That could be an interesting problem, because it could potentially affect not only Apple but a lot of other vendors as well," Tirias Research Principal Analyst Jim McGregor told the E-Commerce Times.

"Will it affect Apple or the rollout of smartwatches?" he asked. "Absolutely not."

Apple's taptic technology, on the other hand, will have an impact on the smartwatch market.

The taptic engine "provides a new interaction that's important to the usability of smartwatches -- something that every smartwatch maker needs today," said Ian Fogg, a telecom and mobile analyst with IHS.

"If Apple Watch is successful, it won't simply benefit Apple directly -- it will benefit Apple's ecosystem of third party apps" he told the E-Commerce Times. "And if Apple drives the smartwatch market, it will benefit other smartwatch makers, too."


John Mello is a freelance technology writer and contributor to Chief Security Officer magazine. You can connect with him on Google+.


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