Our appetite for Apple products could be making it hard for Nintendo to ramp up production of the new Nintendo Switch console according to a recent report from the Wall Street Journal. (opens in new tab)
Though Apple and Nintendo don’t actually directly compete, companies across the tech industry are facing a shortage of the components required for smartphones, computer servers and digital devices such as NAND flash-memory chips, liquid crystal displays and the motors that enable the Switch’s HD Rumble.
It’s the demand for NAND flash-memory in particular that’s apparently causing Apple and Nintendo to butt heads, with a Toshiba spokesperson stating that “Demand for our NAND flash memory has been overwhelmingly greater than supply, and the situation is likely to stay for the rest of this year.”
Demanding too much to supply
The report suggests that the continual consumer demand for the iPhone 7 and the fact that Apple now requires parts for the production of the upcoming iPhone 8 means that Nintendo is struggling to get what it needs from these parts makers who are being pushed to their limits.
It's not clear whether Nintendo didn't anticipate demand for the Switch to grow as quickly as it has or whether it simply didn't foresee such a hardware demand clash. Either scenario is plausible.
Nintendo reportedly hopes to make 18 million units by the time the fiscal year ends in March 2018, a figure that's around double the company's original sales plan.
A report from The Financial Times (opens in new tab) said that Nintendo could sell more consoles than this, particularly with the increase in demand that’s expected in the holiday season. This would all be dependent, of course, on Nintendo actually having the consoles available to sell.
It’s unlikely that Nintendo would win out against Apple in getting first access to the parts it needs. Apple is going to place much larger orders than Nintendo making it a more attractive and stable financial prospect for prospective suppliers.
As a result, analysts suspect that Nintendo may have to increase spending if it’s to secure the extra components it’ll need, although this would require closing the already small profit margins consoles offer.
All may not be lost, though, with the report adding that Nintendo could make use of air cargo units to deliver Switch consoles to the US in time for the Holiday season. It’s not quite Santa’s sleigh but we imagine Switch-hungry Nintendo fans would see it as such. It certainly makes it unlikely you'll see any Nintendo Switch deals appear in this year's Black Friday sales, though.
We’ve reached out to Nintendo for comment on this report and will update when they get back to us.