A key component of the Apple Watch made by one of two suppliers was found to be defective, prompting Apple Inc. to limit the availability of the highly anticipated new product, according to people familiar with the matter.

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The part involved is the so-called taptic engine, designed by Apple AAPL, -3.17% to produce the sensation of being tapped on the wrist. After mass production began in February, reliability testing revealed that some taptic engines supplied by AAC Technologies Holdings Inc., of Shenzhen, China, started to break down over time, the people familiar with the matter said. One of those people said Apple scrapped some completed watches as a result.

Taptic engines produced by a second supplier, Japan’s Nidec Corp., didn’t experience the same problem, the people said. Apple has moved nearly all of its production of the component to Nidec, these people said, but it may take time for Nidec US:NJ to increase its production.

An expanded version of this report appears at WSJ.com.