iPad Demand Is Still Healthy, But Supply Issues Could Mean A Drop In Sales [Analyst]



Apple stock took a battering this week when it was reported that the iPhone 5 wasn’t selling as well as the Cupertino company had expected it to, and it appears analysts aren’t going to let it recover just yet. JP Morgan analyst Mark Moskowitz is now reporting that iPad sales won’t meet expectations due to supply constraints during the fourth quarter of 2012.

In a note to investors today, Moskowitz said that unit sales of the iPad and iPad mini combined will be lighter than expected for last year’s final quarter. He has now lowered his prediction of 20.1 million iPad sales to 18.4 million.

“Our research indicates that near-term supply constraints impacted iPad sell-in activity during the seasonally-stronger holiday season,” Moskowitz said. “Supply did not improve until early December. In our view, it was a supply, not demand issue.”

Because this is a supply issue, and not an issue with demand, Moskowitz sees the shortfall as a short-term “blip.” However, he feels Apple’s explanation of the sales decline will be important as the Cupertino company becomes more reliant on its popular tablet in the coming years.

“We think that, barring entry of another new category, the iPad likely will need to shoulder more of the incremental revenue growth as the iPhone’s incremental growth starts to taper off in coming years,” Moskowitz said.

Apple stock has plummeted this week following a Wall Street Journal report that said the company had reduced its iPhone 5 component orders due to weaker-than-expected demand. However, other reports have since dismissed those claims. Moskowitz sees them as “bear mongering” and feels the iPhone will continue to grow alongside the overall smartphone market.

JP Morgan predicts the global smartphone market will grow 30.5% during 2013, and it expects the iPhone to grow 28.6%.