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MWC: Debates on Mobile Devices Give Way to Supply Issues

A debate is raging today about what exactly can be described as a mobile device. Is it any mobile phones, smartphones, or tablet computers? Do laptops qualify anymore? And how about simple storage devices that wirelessly connect to the Web for data storage, music, on-the-go TVs, or the wide range of multimedia products that are gaining wide acceptance in automobiles?

What other mobile form factors are heading our way, and how will the industry classify them once these hit the shelves? These questions matter to the industry supply chain because they will decide what components suppliers manufacture, what structures they put in place to support them, and how they market such products.

This is one of several key discussions taking place here in Barcelona at the Mobile World Congress. But right now, the industry, though fascinated with the future, is more concerned about basic supply-and-demand issues, such as which components are hot and how to ensure production plants are properly cranked up to meet raging demand.

At the conference, all theoretical discussions end nervously when you bring up the topic of display screens, and specifically, the supply of them. Touch screen technology has caught on so fast, the people who control the glass may be in a position to influence the rest of the supply line. No glass, no tablet. No tablet, no chip sales. And that's making everyone in Barcelona very, very nervous. (See: MWC: Will There Be Enough Displays for All These Tablets?)

Here's a closer look:

11 comments on “MWC: Debates on Mobile Devices Give Way to Supply Issues

  1. Ashu001
    February 17, 2011

    Marc,

    Not clear from your post where exactly are the problems in the Supply-Chain space. Is it possible for you to expand further on this issue(regarding Displays??)

    After all,are'nt most manufacturers ramping up capacity super-fast in this area?

    Or do we have a monopoly of sorts which makes it easier to corner the market for a few goliaths???

    What role do Chinese/Taiwanese OEM manufacturers play here?

    Regards

    Ashish.

  2. Ashu001
    February 17, 2011

    Marc,

    Not clear from your post where exactly are the problems in the Supply-Chain space. Is it possible for you to expand further on this issue(regarding Displays??)

    After all,are'nt most manufacturers ramping up capacity super-fast in this area?

    Or do we have a monopoly of sorts which makes it easier to corner the market for a few goliaths???

    What role do Chinese/Taiwanese OEM manufacturers play here?

    Regards

    Ashish.

  3. Marc Herman
    February 17, 2011

    Hi Ashish,

    Thanks for the great question; we followed up on that today, and as you've probably surmised, it's an issue on which few agree. A desire to ramp up production doesn't mean capacity can be built as fast as demand is growing. Here are some numbers to consider: 12 million tablets sold last year and 50 million predicted for this year in some corners. So that's a ramp up of more than 400% of capacity in six-eight months, or no product, right? We heard two things on the monopoly question. Some saw Samsung as the key player, with as much as 70% of the screens somehow under their umbrella. I could not confirm that number. Others said the market is already usefully diffuse. But no one has hard evidence of any of this, at least not here. It's surprising how vague the information is still. The numbers, at least the public ones, are soft, and that makes people nervous.

  4. Barbara Jorgensen
    February 17, 2011

     I have to wonder if any of this is being driven by Apple's announcement that it has signed long-term agreements with three or four display manufacturers. Apple has already committed the funds to the tune of $3 billion-plus. I think a good chunk of that is going toward screens that use technology that is narrowly licensed to a few producers. So the question becomes–what does Apple know that others don't? Or is Apple's investment fueling this concern and there really isn't a shortage at all? Love to hear back from readers on this….

  5. Marc Herman
    February 17, 2011

    Could be. Apple wasn't at the show, which also speaks volumes.

  6. Taimoor Zubar
    February 17, 2011

    I think enormous growth in demand is the major factor that may lead to bottlenecks as compared to monopoly. The rise in demand for touch-based displays has really been unprecedented. Even at this point I feel that experts may not be able to predict how high the demand will go in near future. 

  7. jbond
    February 17, 2011

    With information being so vague and Apple doing something that makes a lot of companies and consumers wonder, you have to figure that this is either total hype based on Apple or there really is going to be a shortage. I would agree that with an estimate of close to 400% growth in such a short time, it would be hard to keep up with such a demand in such a short time. If this does happen, the repercussions would be felt industry wide.

  8. Mr. Roques
    February 17, 2011

    Which countries control glass production? (should I guess China?)

    From what I've read glass production isn't very flexible, most industries run 24×7 and in order to really increase production you need a new one (which can take over a year to build).

    So how are they handling it?

  9. Ashu001
    February 27, 2011

    Mr Roques,

    You are right.Glass production is a very-very expensive process.

    And it takes a very longtime to increase production dramatically.Right now they are dealing with it by delaying shipments to customers on a priority basis.

    Regards

    Ashish.

  10. Mr. Roques
    March 10, 2011

    So you're saying those factories are leaving orders unattended / unserved? (at least, while they build up capacity).

    In normal conditions, how fast can they deliver an order? I'm guessing their supply chain doesn't adapt well to change.

  11. Kunmi
    March 21, 2011

    Your view is perfectly right, Jbond. This will pose a big challenge in the industry if the demand/supply is impaired. It seemed people are having fun with the touch and scrolls. May be I could suggest this to other tech companies: why can't we have voice activated mobile phones? Let's get into it. The innovation strength of mankind is very unlimited. We just need to discover it.

    Nevertheless, this is apple's era but the company has to keep the trend of supply in order maintain customers satisfaction.

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