Wednesday, March 23, 2011

Japan Tech Supply Chain Issues - Tablet + NFC Impact?

In the aftermath of Japan's tragic earthquakes, tsunami and nuclear disaster, some key components in the supply chain for electronics are being impacted, leading to a slowdown and, in some instances, a shutdown of manufacturing. The long and the short of it is that if you're hoping to get units with solid-state memories such as smart phones, tablets, ebook readers and some laptops you might be wise to grab what inventory is out there. Peter Propp and John Blossom discuss these issues in the latest 10 Minute Strategy video below:

Given the near sellout of iPad 2 units after its recent launch, this may have some interesting repercussions in terms of how Apple's competitors benefit. Will Motorola's Xoom tablet, for example, which got off to a bit of a slow start with a rushed launch to beat out the iPad introduction, find that the component shortage turns out to give their upgraded Xoom equipped with Flash video software and 4G communications a chance to use its inventory effectively in this period? And will the general slowdown work to impact the rollout of devices using Near-Field communications to conduct transactions? In general the answer seems to be that we may see more emphasis on software winning sales and customers over the next several months as hardware inventories   work down and then start to build up again. This may mean that mobile phone carriers especially decide to add more software to keep people happy with existing models while awaiting delayed shipments of new models. Could this be the opportunity for carriers to finally upgrade some of its Android-based models to newer software releases? Could be.

On Near-Field Communications, Google is starting to work on rolling out devices with NFC, but so far in the U.S. the Nexus S is the only Android phone equipped with an NFC sensor (one of the reasons I got one). So while component supply chain issues may be impacting other technology rollouts, the expected small-scale start to Google's NFC operations may not be impacted negatively by the slowdown. On the other hand, if the component shortage isn't addressed by the Fall, it will  mean that it will be harder for them to scale up rapidly once they're through their initial small-scale beata testing phase, leaving open a stronger debut for NFC offerings from Apple and other competitors next year. Hopefully Japan begins to heal soon and get back on its feet, for their own sake and the sake of the world.

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