Analyst: iPad Shortages to Continue into November



Although the iPhone 4 has stolen some of the spotlight, demand for the iPad remains strong, suggesting Apple will have trouble into November building enough units, one analyst said Thursday. Apple is building 7.5-9 million iPods for the September quarter.

“Our checks in the supply chain indicate Apple iPad demand continues to outstrip supply,” Sterne Agee analyst Vijay Rakesh told investors Thursday morning. This indicates “solid preorder/order trends on the iPad given build visibility now extending into November,” he adds.

Apple should sell 30.5 million iPads in fiscal 2011, up from a previously estimated 22 million, the analyst said. The increase stems from what Rakesh terms Apple’s decision to create the “eco-system around the iPad, building a parallel computing universe.”

Rakesh also writes the iPhone 4 is also falling victim to the same overwhelming demand. “Current iPhone4 demand we believe far outstrips near term supply and builds,” according to the analyst. “Checks indicate the supply chain for iPads and iPhones are scrambling to add capacity by late third-quarter 2010 to meet the demand and pre-order outlook from OEMs,” he told investors. However, demand for the iPhone 3G and iPhone 3GS is still strong, contributing 75 percent of iPhone sales, he said.

The analyst raised his iPad sales estimates for the June financial quarter to 3.6 million tablets, up from 2 million. Rakesh doubled his September quarterly sales to 6.5 million iPads, up from 3.5 million units. For fiscal 2011, the analyst now estimates Apple will sell 54 million iPhones, up from the previous 47 million.

Apple should continue to gain market share given the “lack of competitive product portfolio from peers,” Rakesh concludes.

He also increased his estimates for Apple’s quarterly revenue to $14.7 billion (up from $13.6 billion) for June and $17.4 billion (up from $15.6 billion) for September. The Cupertino, Calif. company should earn $61.3 billion for fiscal 2010, up from $58.4 billion, according to Rakesh. In fiscal 2011, he estimates Apple will earn $79.5 billion, up from a previously projected $71.5 billion.