Analysts Dispute provide Chain Conclusions of iPad production Cuts

previous as of late, a report from JPMorgan analysts made headlines for its declare that Apple has slashed its fourth quarter iPad manufacturing plans through 25%, sparking hypothesis and rumors that Apple is also planning a cost reduce amid weakening demand.


The Wall street Journal notes, however, that a few analysts have already spoken out towards the conclusion, arguing that a single supply chain data point is insufficient to warrant such drastic manufacturing minimize predictions. From Piper Jaffray analyst Gene Munster:

We also note that earlier calls based on promote-in or supply chain data have, for essentially the most phase, confirmed to have very little correlation with Apple’s results vs. consensus courting again to early iPod shipments (2003). We imagine Apple purposely maintains sufficient suppliers and manufacturing partners to make anybody supply-facet information level inconclusive.

Analysts also notice that Apple seems to have in fact accelerated production and bumped up 0.33 quarter orders to stockpile iPads heading into the holiday shopping season. Sources also indicate that Apple is more likely to begin production of the iPad three on the end of the fourth quarter or early in 2012 and is also accelerating production now to be able to ease that transition.

Apple struggled with the transition from iPad to iPad 2 manufacturing prior this 12 months, with weak gross sales coming within the first quarter of this year as Apple scaled down manufacturing of the unique iPad and was once unable to fulfill heavy preliminary demand for the iPad 2. From Susquehanna analyst Chris Caso:

We imagine chatter concerning iPad production cuts are misleading – we’ve seen pull-ins, now not cuts. we’ve cited contemporary feedback through opponents discussing iPad manufacturing cuts for 4Q. Our just lately printed AAPL provide-chain assessments stated a sequential decline in 4Q iPad builds from 17 mln-19 mln units in 3Q to eleven mln-13 mln gadgets in 4Q. however, the 4Q sequential decline was once accompanied by using an increase in 3Q builds, major us to conclude that manufacturing was once probably pulled-in from 4Q to 3Q.

Some have recommended that the fourth quarter manufacturing cuts is also because of Apple moving some production to Brazil through the tip of the 12 months, even if most of Apple’s Asian part suppliers could be expected to be serving that production channel in addition to the existing chinese channel.

Apple’s stock dropped as much 3% earlier lately as the preliminary report circulated, but has because rebounded and is at present down best about 1.25%.

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