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Under the radar, Apple's Asian suppliers work furiously

China's iPad look-alikes brace for the real thing
Shanghai (AFP) April 2, 2010 - Apple's iPad has won rave early reviews but its US launch on Saturday is not welcome news for the Chinese maker of a similar-looking device that has already been on sale for nearly eight months. Wu Xiaolong, the general manager of Shenzhen Great Loong Brother Industrial Co said the company had already lost a major order for its iPad-like touchscreen "P88", which was launched in August, months before Apple's product. "Our products are more expensive than theirs. There had been a Canadian university planning to buy our tablet PCs for their students, but they cancelled the order to shift to the iPad," Wu told AFP. The company made headlines in January when it suggested Apple's iPad looked like a copy of the P88, which was on show last year at the Internationale Funkausstellung consumer electronics fair in Berlin.

Wu declined to give sales figures for the P88, which sells for about 569 dollars -- compared to the iPad's 499-dollar entry-level price -- but said the company in southern China was producing 3,000 units a day. "We sold to a number of overseas markets in Europe and North America, including Germany, the UK, France and Canada. We also have distributors in many provinces in China, including Shanghai," he said. However, there was no sign of the P88 or other iPad clones at the four-floor CyberMart in downtown Shanghai on Friday, although plenty of cloned iPods and other products were on display. Apple has yet to announce a launch date for the iPad in China, but Huang Ting, who operates one of CyberMart's more than 100 stalls, said confidently that she expected to be selling the devices around April 10.

"We have to send someone to line up and buy them in the US and then bring them back to China. The 16GB iPad will sell for around 5,000 yuan (730 dollars," she said from behind a counter showcasing rows of iPhones and iPods. Eager customers were paying a 500-yuan deposit, she said. "We already have quite a few bookings," Huang said. China's grey market for Apple products developed to meet demand from consumers eager to get their hands on iPhones, which officially only went on sale in China in October -- more than two years after it was launched in the United States. In the meantime, 1.5 million smuggled iPhones flooded into the world's biggest mobile market before Apple reached an agreement with a Chinese network operator. Apple China officials did not immediately respond to queries on Friday.

A search for iPad on Taobao.com -- China's answer to eBay, turned up 1,600 adverts, mostly from vendors offering to ship the tablet computer from the United States. But many on the e-commerce site were also selling iPad clones and look-alikes, including the P88. One site compared the iPad and the P88's specifications side-by-side. Although thicker and heavier than the iPad, the P88 boasts a slightly larger screen, faster processor, larger memory and, unlike the iPad, has USB ports and a video camera. Other iPad competitors have added features such as global positioning service, or GPS. Apple hopes its device will carve out a niche between smartphones and laptop computers.
by Staff Writers
Taipei (AFP) April 2, 2010
The fevered buildup to Saturday's iPad launch has demonstrated the brute efficiency of the little-known Asian suppliers responsible for turning Apple's design vision into hands-on reality.

Taiwanese touch-screen makers, South Korean chip producers and Chinese battery manufacturers have been adding workers by the hundred to staff extra factory shifts and meet double the forecast demand.

Along the way, the component makers have navigated technical hurdles posed by a product that Apple boasts will remake personal computing with its large, tactile colour screen, super-long battery life and suite of applications.

"iPad suppliers currently forecast eight to 10 million shipments in the calendar year 2010, up from prior expectations of five-plus million," Morgan Stanley analyst Katy Huberty said in a research note.

The iPad, like the iPhone and iPod before it, is the totemic offspring of a globalised economy where components and assembly are sourced to low-cost, high-speed manufacturers, with little regard for geography.

Simplo Technology Co. is Taiwanese but makes components for Apple at its plant in Changshu, in eastern China's Jiangsu province, and has recently shifted into overdrive to fulfill orders for iPad batteries.

Tapping China's massive labour market, the plant's "Apple Manufacturing Department" has added 700 workers since Lunar New Year in mid-February and now employs 1,800 people.

"The product has a tight deadline, and we've been increasing staff numbers to make it," said an executive at the department, giving her surname as Zhou.

"The output of the iPad battery is now 50 percent higher than it was in January," she said.

As a rule, Apple's Asian partners are loath to talk, bound by confidentiality agreements and the California company's notorious reluctance to allow outsiders a glimpse of its inner workings.

But in Taiwan alone, 20 enterprises are involved one way or the other in making the iPad, according to Jonathan Luo of the Topology Research Institute, a private think-tank in Taipei.

Millions of iPads will be assembled in China by Taiwan-based Foxconn, also known as the Hon Hai Group, according to numerous analysts and technology websites.

Taiwan's Catcher Technologies manufactures the device's silver casing, Novatek Microelectronics makes LCD drivers, and Dynapack International makes batteries, Luo said.

South Korea's Samsung, the world's biggest electronics group, is widely believed to have a hand in the super-fast processor that drives the iPad, along with lesser known chip foundries in Taiwan.

The multitude of suppliers is part of Apple's strategy of having ample back-up mechanisms in place, ensuring delivery even when the unexpected happens.

One example is the production of the high-resolution touch-screen, which is new territory for Apple and its suppliers due to its 9.7-inch (25-centimetre) size.

"Most of the components in the iPad are mature items," said Mars Hsu, a Taipei-based analyst with Grand Cathay Securities. "The only component that may have had production problems is the touch-screen."

The main supplier has been TPK Touch Solution. But in a possible indication of technical obstacles, Apple appears to have switched at least some of its screen orders to Wintek, Hsu said.

Both TPK and Wintek declined to comment.

Overall, while customers are set to discover whether all of Apple's furious hype is worth it, the iPad has shown what the global integrated economy can engineer in a short space of time.

Shipment appears to be "right on track regardless of the recent strong rush of demand", said Dean Daeyun Lim, a Hong Kong-based technology analyst with Mirae Asset Securities.

burs-ph/jit



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TECH SPACE
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