iPad 2 supply concerns send Apple shares reeling as tsunami-hit factories struggle to keep up with demand



Supplies will 'dry up within days' of tomorrow's UK and Europe launch

The devastating Japanese tsunami is having untold consequences for Apple enthusiasts desperate to get their hands on the heralded iPad 2.

With many of the components for the new computers made in Japan, suppliers are struggling to get their hands on the necessary materials to keep up with demand – infuriating customers and investors.

Apple’s share price – which hit an all-time high following the iPad 2’s launch – sunk six per cent in two weeks after factories across the country shut down production.

Sought-after: The new Apple iPad 2 which was launched in the U.S. on March 11 and hits UK shops tomorrow

Shares hit $360 a share on March 3, the day after CEO Steve Jobs unveiled the new iPad, but sunk to $330 a share on March 16 as it dawned on investors that supply lines were badly hit by 9.0 magnitude earthquake and tsunami on March 11.

Japanese factories make around 25 per cent of the components needed for the new computer, with may hard to source elsewhere.

Many manufacturers are unable to start production until any aftershocks have completely subsided, and this has pushed back delivery times and meant lines outside stores remain long.

The NAND Flash memory, touch screens, image sensors, batteries and the special resins that are used to hold chipsets together are all made in Japan.



Stock fortunes: The share price hit an all-time high after Steve Jobs unveiled the iPad 2, but with factories unable to produce the components, the share price has suffered

Scrum: Huge lines were scene outside New York's Apple Store on launch day - the same day as Japan's tsunami

Rolling blackouts continue to hit those factories that have been able to start up again.

Investors are starting to worry about Apple’s ability to keep up with customers’ demands, with online waiting times going from three-to-five days when launched, to three weeks a week ago, to up to five weeks today.

Japan's iPad launch was delayed after the tsunami hit and Apple are yet to give a date when it might finally go on sale there.



In Europe, the iPad 2 is launched tomorrow and experts fears the scramble for the must-have gadget could lead to stock shortages within days.

Stuart Miles, of website Pocket-lint, said: I think there will be big shortages. The people who queue up on Friday and get there early will get them.

'But I think people may be straggling around to get one on Saturday and by Monday or Tuesday supplies will start drying up.'

Devastation: The tsunami badly hit Japan, where a quarter of components for the iPad 2 are made. Factories have been suffering aftershocks and blackouts

Colin Gillis, analyst at BGC partners told CNN: ‘Apple always has supply constraints with its in-demand products, but now there are more broadband concerns about every component from the simple to the most advanced ones.

‘The story's not over; we have to keep watching this.’