In a move that even took analysts by surprise, Apple has recently slashed iPad orders by 25 percent for the fiscal fourth quarter. The cuts, which surfaced over the past two weeks, could indicate renewed urgency for the iPad 3 or a plot to corner tablet suppliers. Or it could mean that even Apple’s not immune to an economic downturn.
The drop in orders — the first ever from Apple — could impact the Cupertino, Calif. firm’s suppliers, such as Hon Hei, parent company of Foxconn, a major manufacturer of iPhones and iPads. According to Bloomberg, a 25 percent cut could mean Foxconn ships 13 million iPads in the fourth quarter, down from 17 million units in the previous quarter.
Despite the weekend note cited “several” of Apple’s suppliers, JPMorgan analyst Mark Moskowitz retains he estimates of 10.9 million to 12 million iPads shipping during the third and fourth quarters. With what Gartner believes is 73 percent of the tablet market, Moskowitz wrote earlier that Apple does not need to rush introducing the iPad 3. However, that has not stopped Monday morning speculations on why the tech giant has suddenly reduced iPad orders.
One report suggests the one-fourth drop in iPad orders is because Apple is shifting some production from China to Foxconn’s Brazil plant. Earlier this month, Brazil’s Minister of Science and Technology Aolizio Mercadante said the plant would be up and running in December.
A more sinister speculation is that Apple intentionally increased early iPad supply orders to tie up the infrastructure needed by rivals to produce devices. However, a more down-to-earth possibility was suggested by a Taiwan-based analyst quoted by Bloomberg: it’s the economy, stupid.
“It’s back to reality,” remarked Wanli Wang of RBS Asia Ltd. in Taipei.