Concerns mount over Apple's supply chain - Could disruptions hurt its profit margins?

Apple relies on a group of suppliers to ensure its products are assembled and delivered on time to its stores throughout the globe. However, Apple's dependence on Japanese suppliers could hurt its profits and sales through the end of 2011, Bloomberg reports.

The 9.0-magnitude earthquake and subsequent tsunami that ravaged Japan on March 11 all but stopped the country's infrastructure and prompted many companies to either scale back or shutter their manufacturing in the wake of the devastation. According to a recent survey, a growing number of analysts contend the supply chain disruptions emanating from the country could eat into Apple's vaunted profit margins during the latter half of 2011.

Currently, Japan serves as a hub of component manufacturing for companies throughout the globe. Japanese companies are responsible for more than 20 percent of all components used in electronics equipment. Apple works with Japanese companies to source its flash memory, batteries, touch-screen glass and resin used to attach chips.

That Apple relies so heavily on Japan for parts has unsettled investors and analysts alike, prompting concerns that the company will face a slowdown in sales during the latter half of the year - when sales tend to be robust. The Cupertino, California-based technology giant has had to deal with supplier disruptions in the past; in March when its iPad2 went on sale, there were reports of stores selling out throughout the U.S.

Now, the darling of Wall Street must answer investor worries that those supply chain disruptions could cause a decline in revenue, sales and profits, Oakbrook Investments portfolio manager Giri Cherukuri said in an interview. "People want to know how strong the supply chain is and how much backup supplies they have," Cherukuri affirmed. "You want to know if it's temporary or how long it's going to affect things."

So far, market indicators have illustrated the uptick in prices for a variety of electronics components. The price of flash memory, for example, has climbed 13 percent since the day of the quake. The rise in flash drive prices is troubling as it serves as the main source of storage for a number of Apple's most popular devices, including its iPhone, iPad and Macbook Air.

Apple will release its second quarter earnings after the close on Wall Street on Wednesday, and though the company is forecast to surge past expectations, speculation continues to built over whether the tech giant can keep up its torrid growth - especially if it has to scramble to shore up its supply chain.