People keep asking me why I don’t have a Nintendo Switch yet. The big reason, beyond obscure metal bands releasing cool-looking vinyl albums, is that you can’t just go and impulse-buy one on Amazon or in store right now. It’s a thing you have to prep for and attempt to buy. Now, why is the Switch still so hard to buy? Theoretically, it shouldn’t be that hard to make. The Joy-Con are unique but still just using some fairly common antennae and sensors in a unique implementation. And the base of the Switch is basically just an Android tablet. Well, see, there’s the problem: there’s a tiny company out of Cupertino named Apple that’s choking up the supply chain.
My latest: smartphone makers like Apple and data centers are latest rivals of Nintendo ramping up Switch production https://t.co/twt8ViQQac
— Takashi Mochizuki (@mochi_wsj) May 30, 2017
According to the Wall Street Journal’s erstwhile Takashi Mochizuki, “The problem is an industrywide capacity shortage for components used in smartphones, computer servers and other digital devices." NAND flash memory is a major source of these shortages: Toshiba’s been having legal troubles, but is staying afloat thanks to its NAND storage business. Now consider that while Nintendo is no spring chicken, Apple sells a massively-profitable product in massive quantities. They are bound to get first priority from any supplier of these important parts. And while other phone manufacturers like Samsung aren’t quite pulling down Apple-level profit, they’re still delivering consistent, large-scale business to suppliers. So they often get first priority from suppliers above Nintendo. And since the Switch costs just $299 as opposed to the $700-$800 MSRP of many flagship mobile phones, Nintendo can’t risk pushing for higher component costs lest they make the Switch’s production cost go above the $299 MSRP. It all leads to an interesting problem for Nintendo, where they’ll have to figure out just how to keep making Switch units while competing in a cutthroat supplier race.
So if you can’t find a Switch any time soon, maybe pull out your phone and say “this is all your fault!"
