Chinese factories stuck with useless iPad inventory

In business, it's important to get your products out first when there is an opportunity. Arriving at the FA Cup Finals one day late, with a hot dog that's 10x better, is a poor decision. However, it's also possible to go too soon. Right now, an array of Chinese factories are crying into their chicken and sweet corn soup while brand new iPad inventory gathers dust. KitGuru fakes a visa and goes to investigate.

While the iPad makes loads of money for Apple, actually selling the devices generates precious little profit for anyone else. The killer for Apple products is the little ecosystem of cases, covers, speakers and other accessories that you can sell around them. That's where the high street profits live.

Ahead of the launch of each iPad, Chinese factories have managed to get early access to the design and begun preparing new accessories – before getting the official specifications etc from Apple.

Moving from iPad 2 to The New iPad (3), there seemed to be little physical difference. Once the Chinese had confirmed the physical shape, they moved straight to the production phase – building a mountain of hundreds of thousands of magnetically sealing covers etc – all with new packaging declaring them to be 100% compatible with The New iPad (3).

Ooops.

Whether it was a required design decision or a much more subtle “F*** you” to the 3rd party accessory market, Apple decided to move the position of the magnetic locking mechanism on The New iPad (3).

Reports in from channel experts are telling KitGuru that around 10-15%  of the new covers have been lucky, and there IS enough of a magnetic attraction being generated that they will seal shut.

That leaves up to 90% of all the new inventory useless – sitting in warehouses and not able to be sold.

KitGuru says: If the Chinese factories put this down to experience, take their lumps and move on – then that's one thing. If they decide to ship anyway, then that could lead to a world of grief for customers. Fingers crossed they are in ‘lump taking mood'.

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