JPMorgan Report: Apple Cut iPad Supply Chain Orders

Possibly due to weakening demand

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Apple is cutting down on orders to vendors in the iPad supply chain, analysts from JPMorgan Chase & Co. in Hong Kong said in a report yesterday. According to their findings, several vendors said over the past two weeks that the computer manufacturer had lowered fourth-quarter iPad orders by 25 percent—the first such cut that the report’s authors had ever seen, said Bloomberg News.

For iPad parts vendors like China’s Hon Hai Precision Industry Co. (the report doesn’t actually list specific companies), the reduced orders could mean a drop from 17 million units in the third quarter to 13 million units in the fourth quarter.

Still, the report says that JPMorgan U.S. analyst Mark Moskowitz, who covers Apple, isn’t planning to lower his projection of 10.9 million to 12 million units of iPad shipments in the third and fourth quarters.

As for why Apple is reducing its iPad orders, it could be related to weakening demand in Europe due to a poor economic climate, or an Apple strategy to operate with reduced inventory, RBS analyst Wanli Wang told Bloomberg. “Now it seems even for Apple, due to the market situation, we need to be conservative,” said Wang.

So far, there has been no confirmation of the supply chain cut from Apple.

@adweekemma Emma Bazilian is Adweek's features editor.
Publish date: September 26, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT