Apple surprises with supply chain cuts for iPad 2
updated 07:40 am EDT, Mon September 26, 2011
Apple ramping down iPad 2 production by 25%
Apple is reportedly cutting orders to vendors in its supply chain for the iPad 2 by 25 percent, according to Bloomberg. JPMorgan analysts in Hong Kong claim that it is the first time that they have seen cuts of this order. However, news of the cut is not expected to impact on projected sales for what is one of Apple’s halo products.
The purported reduction in orders could result in production of the iPad 2 for Foxconn to slip to 13 million for the fourth quarter, down from 17 million that it delivered in the third quarter. Despite the development, JPMorgan US analyst Mark Moskowitz has maintained his estimation of iPad 2 shipments for the fourth quarter 10.9 million to 12 million units.
Although some rumors had Apple shipping an iPad 3 in the fourth quarter this year in response to the perceived threat of Android 3.0 (Honeycomb) tablets, the failure of competitors from Samsung, Acer, ASUS and others to make a significant dent in the tablet market dominated by Apple saw those rumors die out.
It is possible, however, that Apple could be ensuring that it does not have an oversupply of iPad 2s when it launches an iPad 3 as expected in early 2012.
Fresh-Faced Recruit
Joined: Apr 2010
Better explanation...
How about Apple reduced production in the Middle East because the Brazilian Foxcon factory will make-up the difference? It was reported that it started production recently and that it was set-up to produce the iPad 2, not any forthcoming models. There were no reports, whatsoever, that sales of iPad 2 are dropping.