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Apple Watch production delayed as engineers wrestle with quality issues

Radical new design and COVID-19 disruptions threaten shipment timetable

A customer browses Apple watches at the new Apple Store on Broadway in downtown Los Angeles.    © Reuters

TAIPEI -- Production of the upcoming Apple Watch has been delayed in large part due to the complicated designs of the new smartwatch, Nikkei Asia has learned.

Manufacturers of Apple Watch 7, as the device is expected to be called, began small-scale production last week but encountered critical challenges in reaching satisfactory production performance, multiple people familiar with the situation said.

Three sources said the current disappointing production quality could be attributed to the complexity of design, which is significantly different from that of previous generations of the watch, and the assemblers found issues when putting together electronics modules, components and displays.

As a result, the production of the new watch has been temporarily halted as Apple and its suppliers try to sort out the problems and further certify the designs before going into mass production, four people said.

The next Apple Watch will come with new features such as blood pressure measurement, they said, which means production involves fitting a greater number of components into a similar size body. The new product must also meet requirements for water-resistance performance, further increasing the engineering and production challenges, the people said.

"All assemblers are facing similar problems in reaching satisfactory production performance based on the current industrial designs," one of the people with direct knowledge of the matter told Nikkei Asia.

Apple has also asked component suppliers to delay some shipments to assemblers, sources said.

The company has overhauled the popular smartwatch and the interior design, including the position of various modules, differs from previous generations of the product, the people said.

However, disruption from the COVID-19 pandemic has made it difficult for Apple and its suppliers to travel back and forth to verify the new specifications, making it hard to discover difficulties with the design until test production starts, two of the people said.

"Apple and its suppliers are working around the clock trying to solve the issues, but currently it is hard to tell when the mass production could begin," one of the people added. Apple previously planned to put Apple Watch 7 into mass production around mid-September, another person said, and the engineering team is working to minimize delays.

Apple was scheduled to unveil the new watch along with the latest iPhones in the coming weeks. The current issues might affect the U.S. company's shipment plans following the unveiling, the people said.

The Apple Watch, first released in 2015, is one of the fastest-growing products for the California-based tech company. New functions such as electrocardiography, sleep tracking and the ability to unlock iPhones while wearing a mask have helped increase the gadget's popularity. Apple is the world's biggest smartwatch maker, shipping 36 million Apple Watches last year, for an annual growth rate of 39%, according to research company IDC.

In addition to Apple Watch and iPhones, Apple is set to introduce new AirPods, iPads, and MacBooks in the second half of 2021.

Apple declined to comment.

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