iPad 5 Shortages Could Occur if Apple Uses New Technology

It seems like only yesterday supply chain sources were telling DigiTimes that Apple AAPL might ship fewer iPads than expected in 2013. Actually, it was yesterday. Now DigiTimes is reporting that iPad shipments could be even lower. This decline is not being blamed on lowered expectations, however -- it is being attributed to supply constraints. According to the report, Nissha Printing (a Japanese-based company) will supply thin-film touch sensors for the fifth-generation iPad. Those sensors are expected to be the same ones that are featured in the first-generation iPad Mini. This is where the problem comes in. Nissha is only capable of producing 60 million sensors per year. Only one sensor is required for each tablet, so Apple could feasibly produce 60 million iPads. However, that would be far less than the estimated 88 million to 100 million tablets that Apple aimed to produce. To compensate for its growing orders, Nissha plans to increase production capacity by 30 percent before the end of the first quarter. If successful, the company should be able to produce another 18 million sensors, bringing the total to 78 million. Apple would still need to find another supplier to provide the rest, however. Even if it does, the problems may not be solved. DigiTimes' sources believe that another conflict could arise. "The supply chains, which will not be entirely the same even though similar technology is expected to be used in the two types of tablets, may have to scramble for the thin-film touch sensor technology during the second quarter of the year in order to meet shipment demand in the following quarter," Siu Han wrote. "The sources eluded that this type of internal supply chain conflict may cause one of the devices to lack in shipments upon their release." Regardless, 78 million is a lot of tablets. Even if Apple is only able to ship 50 or 60 million units, there should be plenty for consumers to purchase throughout the year. It could be a while before the device ships though. Most analyst believe that Apple will not ship the next iPad, iPad Mini 2 or iPhone 5S before the third quarter. Follow me @LouisBedigianBZ