Apple is proving to be a problem for Nintendo and its wildly popular Switch console, according to a new report.
Nintendo is experiencing Switch shortages due to low supply of critical components, like memory chips that store data and liquid-crystal displays, which Apple is gobbling up for its own products, The Wall Street Journal is reporting, citing sources who claim to have knowledge of the problem. Those sources told the Journal that strong consumer demand for Apple’s existing iPhone 7 line of devices, as well as work on upcoming handsets from the technology giant, leave little supply for other companies, like Nintendo.
The Nintendo Switch has proven to be one of the year’s biggest hits. The console allows users to play games on their televisions, but can also be detached from a dock for mobile play. The device is currently unavailable at major retailers, and whenever new stock is made available, it quickly sells out. Nintendo has said that it’s working as hard as it can to get new supply to customers, but it’s been slow going.
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Nintendo (NTDOY) hasn’t commented on why supply isn’t ramping up to the degree some might like, and has instead touted the strong demand for its hardware. However, the Journal‘s sources suggest that Apple, which makes some of the world’s most popular products, has far more power in the supply chain, thanks to the massive number of units it orders from suppliers. Apple’s (AAPL) orders, therefore, are being fulfilled before others, leaving Nintendo to wait in line.
The Journal‘s sources said that Nintendo could respond by spending more on parts, but the move could push its console pricing to more than its current $299 price—something the company is apparently unwilling to do.
Still, there are no signs of when Nintendo might overcome its Switch’s supply troubles. The company has said that demand will likely will remain strong through the end of the year.
Meanwhile, Apple might not present many opportunities for Nintendo to jump the line. The iPhone maker is rumored to be planning three new handsets this year, and many analysts have said that 2017 could represent a “super-cycle” for Apple due to exceedingly high demand for its next handsets.
