iPad sales dipped below 10 million this quarter for the first time since 2011 — and the lack of demand for tablets is hurting Apple’s suppliers.
According to a new report, the Taiwan-based company Coretronic, which provides backlight units for Apple, has been forced to cut down its work force at three separate factories in Taiwan, while closing a subsidiary in Nanjing, China completely.
The company blames the lack of demand — specifically for the iPad mini 4 — on the fact that Apple hasn’t come up with enough modifications to make the devices “must have” products.
It’s a valuable lesson about the dangers of third-party suppliers tying themselves so closely to the fortunes of a giant like Apple. Yesterday’s monster earnings call shows that numbers are up in just about every aspect of Apple’s business, with the notable exception of iPads.
Apple CFO Luca Maestri yesterday acknowledged that the iPad has been cannibalized by some of Apple’s other products, most notably larger phones.
We guess you win some, you lose some as an Apple supplier. It’s not like Apple’s been a bad earner for those on the supply side though, is it?