Apple iPad Could Be Experiencing Manufacturing Issues, Says Analyst

Apple's iPad tablet PC could be experiencing unnamed issues within its manufacturing pipeline, which could limit the scope of the device's initial rollout, according to Canaccord Adams analyst Peter Misek. The news comes just as Apple is ramping up content deals with a number of content providers, as well as encouraging developers to use the iPhone SDK 3.2 beta to create mobile applications for the tablet. Apple has predicted the iPad will support 140,000 apps at launch.

Apple's release of its iPad tablet PC could initially be limited due to unnamed issues within its manufacturing pipeline, according to a widely circulated analyst report.

Canaccord Adams analyst Peter Misek wrote in a March 1 research note, widely reprinted on sites and blogs such as Apple Insider, that Apple was experiencing "an unspecified production problem at the iPad's manufacturer, Hon Hai Precision," that would "limit the launch region to the U.S. and the number of units available to roughly 300k in the month of March." Although the launch could also potentially be delayed until April, Misek added, Apple could sell as many as 1.2 million iPads in fiscal year 2010.

That news comes as content developers, including Conde Nast, are developing apps that take advantage of the iPad's 9.7-inch touch screen and 3G connectivity. Conde Nast's first publications adapted for iPad will include Wired, GQ, Vanity Fair and The New Yorker, according to a March 1 article in The New York Times. Apple's negotiations for content have included, reportedly, offering television shows from an undefined number of studios on the iTunes store for a dollar apiece.

The iPad represents Apple's latest attempt to consolidate its mind- and market share in the mobile device space. The company currently dominates the mobile-application market, at least by volume; according to research firm IDC, the number of apps in Apple's online App Store will expand to around 300,000 by the end of 2010. Apple is also planning for some 140,000 applications to be available for the iPad by its launch, and has been encouraging developers to download the iPhone SDK 3.2 beta in order to create programs for the device.

As its mobile-application ecosystem has grown, Apple has begun taking steps to police the App Store, pulling certain apps with explicit content and cleaning the storefront of developers who post false positive reviews of products. In a Feb. 22 article in The New York Times, Apple's head of worldwide product marketing, Philip Schiller, confirmed that the company had been receiving complaints from groups that content was becoming "too degrading and objectionable," although apps from established brands such as Sports Illustrated have been allowed to remain.

On Feb. 24, bloggers and developers noted an "Explicit" category that briefly appeared on the iTunes Connect System, which lets developers submit new apps to the App Store, but the category disappeared as soon as news of it spread. Whether its appearance was a test or a glitch remains to be seen.

In any case, the prospect of the iPad's release has led to a spike in third-party developers building apps for the iPhone OS, according to mobile analytics company Flurry, which noted in a Feb. 12 company blog posting that there had been a threefold increase between December and January in the number of Flurry analytics being integrated into iPhone OS applications. According to Peter Farago, vice president of marketing for Flurry, those numbers were indicative of "excitement generated by Apple's iPad event in January."