iPad 2 Recall Adds to Supply Concerns

The recently announced recall of some Apple AAPL iPad 2s designed to work on the Verizon Wireless VZ network could further constrain supplies of the popular tablet device, this at a time when the company is already struggling to meet demand. Apple has halted the delivery of an "extremely small" number of iPad 2s because of a manufacturing issue with duplicate mobile equipment identifier (MEID) numbers. The issue affects both 32GB and 64GB iPads. An MEID is a unique number associated with mobile devices, such as tablets or smartphones, that carriers use to identify equipment on their networks. The number is hard-coded into devices and resistant to modification, so a duplication issue would justify a product recall. Apple Stores are offering $50 store credits to customers who have to exchange their Verizon iPad 2s for new ones due to the glitch. Apple says this glitch is not likely to have long-term consequences. The company has sold 25 million iPads already and expects to sell 8 million more this quarter. However, an explosion at the Foxconn iPad manufacturing plant, on top of a scarcity of components following the earthquake in Japan, has added to supply concerns.