AAC Technologies Shares go down after Apple Watch Defect Reports

AAC Technologies’ share price goes down by 8 percent as soon as Apple found a defect in a component which was made by the China based company.

AAC Technologies is responsible for making components for Apple. Apple were buying components from AAC Technologies for their Apple Watch. Now because AAC Technologies was making a defective component for Apple Watch, their share price is fallen down by 8 percent. And the other major thing that has happened is that Apple Watches have stopped coming to the market.

The Apple Watch production has taken a hit because of AAC Technologies. A taptic engine was designed by Apple and it was made to feel the sensation of being tapped on the wrist. Two manufacturers supply this taptic engine. One of them is AAC Technologies (Hong Kong) and the other one is NiCorp (Japan).

Apple told AAC Technologies that they wanted these taptic engines and made a mass production deal. The mass production started in February but with time some of the AAC Technologies taptic engines started to break time over time. Whereas Nitaptic engines are working just fine.

Now Apple are looking for new suppliers as the American company is looking to drop the Chinese based company. So now Apple is looking to add a second assembler for the Watch. Apple is looking to supplement Taiwan’s Quanta Computer Inc.

So Foxconn who are the main assembler of the iPhone, recently started testing so that they could produce the Apple Watch. All of this situation is creating a bottleneck and this is the main reason why people can’t seem to get their hands on this new watch. And Apple also told some Watch suppliers that they need to slow down production until June.

They didn’t give any reason to their suppliers for this delay. People are now angry because Apple started taking orders for their Apple Watch from April 10th and they even began shipping their watches from Friday. Apple Watches can still be bought from online stores. You will find them on select designer boutiques.

One thing that is bothering the people is that why Apple is not selling the Watches in its own retail stores. There was a memo to the retail stores from the Apple retail chief Angela Ahrendts.

She said that the retail stores will not get to sell the watches until the end of /4/and this because of a high global interest which is combined with Apple’s initial supply. The online orders would be delivered in June. AAC Technologies’ competitor NiCorp. will benefit from their defective component situation. 

Sources: Reuters, Barron’s Asia