Apple, Tech Industry Affected by Japan Quake, Leaders Vow to Help Restore Market
At the beginning of this month, Apple released its newest tablet, the iPad 2. It was an event that has been keeping Apple and tablet fans in awe. Apple invested a great deal of time and money into the new device in order to impress its core audience, and keep its leading position in the market. But the early results have out-shined the company’s expectations. This year, tablet sales increased by 67 percent in comparison with last year’s performance, and the delivery times after orders have already extended from one week to 4 or 5 weeks. If this wasn’t enough, to certify Apple’s success with the new tablet, the Apple Inc. shares got a fractional rise of 1 percent yesterday morning on the stock market. The trading price was $352.75 per share, floating Apple in a post-launch glow.
Yet, not everyone lives in clovers and sunshine, as the recent unfortunate events in Japan force companies to change plans and adapt to new situations. Apple decided it would be wise to postpone the launch of the iPad 2 device in Japan to a later, unspecified date, until things settle. Apple has only one store affected by the earthquake, and is committed to helping the country get back on its feet.
Although the situation seems in control at the moment, analysts consider the Japan earthquake will significantly influence the tech market in the next period. Japan represents about 2 or 3 percent of the demand for handsets and, at the same time, Apple, and Sony Ericsson have high single-digit shipping exposure to Japan. Japan is also providing world markets and producers with raw materials, flexible-PCBs, passives/filters, RF, memory and other semiconductors and displays, meaning delays are expected to occur over the next quarter. It is very likely that prices of raw material and or gadgets to rise, although there has already been a 17 percent price rise of flash memory in chip-trading markets in Asia on Monday.
Major tech companies with factories in Japan have been seriously affected by the earthquake as well, and the consequences will be seen in rising prices and delays in deliveries from most tech companies. “There will be individual companies in the U.S. that are not going to be able to get their supplies for anywhere from weeks to months,” Alexander, the Georgetown economist, said. “There certainly will be suppliers who are either out of business or have lost their capabilities for the moment.”
Sony announced it has suspended the activities at seven manufacturing plants; Canon has three plants seriously affected by the earthquake and Toshiba, producer of memory chips for the Apple device among others announced it resumed its activity two days ago.
But major companies, especially those in the U.S., take a hand at helping Japanese companies recover as soon as possible. Microsoft for example announced it would offer $250,000 in cash and $1.75 million in free software and services for re-establishing communication lines on the island, while Google created an online crisis center on the exact day of the event that impulse the circulation of news and information. Social media has stepped in as well with Facebook teaming up with Zynga and Save the Children’s Japan Earthquake Tsunami Emergency Fund “to get users to donate money through the purchase of virtual goods in CityVille, FrontierVille, FarmVille and other games.”
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