Rumor: Apple Has iWatch Manufacturing Snag

iwatch

Apple iWatch concept by Anders Kjellberg / dogday-design.se

Although Apple (NASDAQ:AAPL) has never confirmed the development of its so-called iWatch, rumors of problems with a trial manufacturing run have emerged from the company’s Asian supply chain.

According to a report from the Taiwan-based DigiTimes, Apple’s iWatch is seeing “less than 50 percent yield rates” due to manufacturing difficulties related to the device’s metal injection molded, or MIM, chassis. DigiTimes’ upstream supply chain sources said iWatch manufacturers have encountered problems with the application of surface treatments to the MIM components.

Per DigiTimes, “The MIM process is often used in the mass production of high-precision products with complicated industrial designs as it allows components to feature special shapes, but still maintain rigidness.” MIM components were previously only used inside of products. However, the ability to make complex industrial designs using this process has increasingly made MIM components part of various products’ external design. Surface treatments are a way for product designers to ensure a certain appearance for these external components.

“Since clients have high demand over quality, and also need high volumes of supply, most component makers are having difficulties satisfying both of [these] requirements,” DigiTimes’ sources said.

If the report is accurate, Apple is not the only wearable tech company to have encountered yield issues due to this manufacturing problem. According to DigiTimes’ sources, Qualcomm (NASDAQ:QCOM) has run into similar problems with the manufacturing of its recently released Toq smartwatch. The Taiwan-based tech site also noted that Sony (NYSE:SNE), Samsung (SSNLF.PK), Pebble, Casio, Nike (NYSE:NKE), Adidas, Epson, and LG are all planning on launching wearable tech products this year.

It should be noted that DigiTimes has a mixed track record when it comes to the accuracy of its supply chain rumors. On the other hand, many industry watchers have also predicted that Apple will unveil a wearable tech product in 2014.

DisplaySearch analyst David Hsieh said Apple would release its long-rumored iWatch in the fourth quarter of 2014. Christian Lindholm, CEO of wearable tech software company Koru, also forecast that Apple will debut a smartwatch in time for Christmas 2014. Finally, well-connected Apple commentator Mark Gurman at 9to5Mac cited sources that reported Apple had assembled a wearable tech product development team that included medical sensor specialists, fitness professionals, and battery efficiency experts.

More from Wall St. Cheat Sheet:

Follow Nathanael on Twitter @ArnoldEtan_WSCS