Apple's iPad Ecosystem: Suppliers and Developers Hard at Work
Take a peek at the latest figures on Apple's physical and digital supply chains--and what they say about iPad adoption.
It's no surprise that the thriving virtual businesses surrounding Apple's products receive all the attention. Who isn't impressed by the expanding iTunes and App stores, which sell an ever-expanding digital smorgasbord of music, videos and applications?
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App Store developers, in fact, seem to be the new "rags to riches" business story. At the June WWDC confab, Apple CEO and uber presenter Steve Jobs noted that the company has paid out $1 billion to those developers so far.
Apple's recent $15.7 billion quarterly results detail a bustling commerce that enriches not only Apple but also the players selling their wares in Apple's orbit—to the tune of $1 billion in iTunes Store revenue in Q3 and an App Store that offers more than 225,000 apps, notes a Macworld article.
It is a digital supply chain unencumbered by geographic, physical production or transitory costs.
Nevertheless, there is another world comprised of manufacturing suppliers, factory workers and oceanic shipments of Apple-related products that is also booming: laptop bags, iPhone cases, iPod earbuds and everything else a Fanboy could ever want.
So the smart folks over at Panjiva, which analyze global supply-chain data, set out to see just "how quickly an ecosystem would grow up around the iPad." The virtual one has already materialized: The App Store, for instance, sells more than 11,000 apps specifically for the iPad.
For those living in a cave, consumer demand for Apple's tablet PC has shocked-and-awed everyone, including Apple executives. That iPad demand has placed even more pressure on Apple's vaunted supply chain and its suppliers: 3 million iPads sold in just 80 days will do that to you. iPad orders are now backlogged up to 10 business days on Apple's online store, notes a CIO.com article, and the supply will become tighter as Apple expands its global sales efforts.
The result: Suppliers, such as LG Display, simply can't keep up. CEO Kwon Young-soo said that LG Display had been unable to fulfill orders for displays used in Apple's iPad, reported AppleInsider.com, but promised "without fail" to catch up with demand by the second quarter of 2011. (2011!)
"Demand [from Apple] keeps growing," Young-soo said, "and we can't meet it all."
According to Panjiva, there's also growing U.S. consumer demand for iPad accessories—such as iPad sleeves, iPad gummy crystal cases and iPad screen shields—that demonstrates the iPad's popularity.
Panjiva data shows that March had only two iPad-related shipments; April saw nine; and there were 20 in May. June, however, saw more than a doubling in shipments to 51. (A "shipment" is based on each customs slip with the item "iPad" on it. This does not include actual iPads, since "super-secretive Apple" calls the computing devices something other than iPads on shipping documents, writes Panjiva CEO Josh Green on his blog.)
"Nevertheless," observes Green, "the data serves as a dramatic illustration of just how quickly manufacturers are hopping on the iPad bandwagon."
It's a fast-moving bandwagon that many are trying to catch—and stay on for a long time.
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