The news keeps on getting worse for Apple in the wake of the Chengdu Foxconn explosion. Besides the ghastly loss of three lives and the dozens of wounded Foxconn employees, the explosion could cost Apple half a million iPad 2s. Given existing supply problems, that’s a number of lost iPads Apple can ill afford to lose.
Says iSuppli:
The drop in manufacturing will depend on how long the plant is closed following a May 20 explosion that killed three people and injured at least 15, according to ISuppli. The total could be even greater if the suspension of operations at the facility lasts longer than a month, the firm said. Another Foxconn factory in Shenzhen that produces iPads may not be able to make up for the lost output, ISuppli said. The manufacturing breakdown may lead Apple to miss ISuppli’s forecast of 7.4 million iPad 2 shipments in the quarter ending in June, the El Segundo, California-based research firm said.
Apple’s Phil Schiller endorses an incredibly short supply chain: he’s basically got Cupertino and its manufacturing partners humming to the point that there is very little inventory sitting in warehouses and on shelves, and Macs and iPads built in a factory in China almost always end up sold within a few weeks.
Has Schiller shortened the supply chain too much, though? For the last year, Apple’s had problems making enough iPads to satisfy demand, and tragedies like at Chengdu really emphasize how vulnerable and fragile the supply chain can be. What do you think?
