Apple Inc is cutting orders to suppliers for its iPad tablet computer, a move that may result in slower sales for these companies, including Hon Hai Precision Industry Co (鴻海), JPMorgan Chase & Co said in a report on Sunday.
Several supply-chain vendors indicated in the past two weeks that Apple lowered fourth-quarter iPad orders 25 percent, the first such cut that analysts at JPMorgan’s electronic manufacturing services team in Hong Kong said they have ever seen.
The report did not list affected companies, and Gokul Hariharan, one of the report’s authors, said he could not comment when reached by Bloomberg News yesterday.
For a supplier such as Hon Hai, the cut could mean a drop to 13 million units in the fourth quarter from 17 million units in the third quarter, JPMorgan analysts wrote.
The report said JPMorgan US analyst Mark Moskowitz, who covers Apple, does not expect to lower his projection of 10.9 million to 12 million units of iPad shipments in the third and fourth quarters after the supply chain adjustments.
EU CONCERN
Reduced orders from Apple to iPad suppliers could reflect both weakening demand in Europe due to economic conditions there, as well as a strategy by Apple, the world’s biggest company by market value, to operate with reduced inventory, Wanli Wang (王萬里), a Taipei-based industry analyst at RBS Asia Ltd, said yesterday.
“It’s back to reality,” Wang said. “Now it seems even for Apple, due to the market situation, we need to be conservative.”
So far there is no confirmation from Apple that it has reduced orders to suppliers, Wang said.
Both Apple and Hon Hai did not respond to Bloomberg requests for comment.
Shares of the Cupertino, California-based iPad maker rose 0.6 percent to US$404.30 on the NASDAQ on Friday.
Apple’s iPad may account for 73 percent of tablet computer sales this year, according to research firm Gartner Inc. Products that run on Google Inc’s Android operating system will probably have about 17 percent of the market, Gartner said in a Sept. 22 note.
COMPETITION
Because of its current dominant market position, Apple does not have to rush to introduce its iPad 3 tablet computer as potential rivals have failed to emerge to siphon sales from the current model, Moskowitz wrote in a Sept. 16 report.
Amazon.com Inc may release a product late this year that could become the No. 2 tablet in the market behind the iPad, Moskowitz wrote in that report.
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