Quit your worrying. That’s essentially the message coming from one Apple watcher on Wall Street following a day of hand-wringing over a report Apple had reduced by 25 percent iPad 2 orders from suppliers. Improvements in the tech giant’s supply chain and inventory still mean plenty of tablets for the anxious hordes of iPad customers.
Sterne Agee analyst Shaw Wu grudgingly agrees there is “some merit” to Monday’s claim Apple recently began reducing order for the iPad 2. However, the reasons are more mundane than a comical fall off in demand or some evil plot to tie up suppliers rivals need.
“Production changes are common throughout a quarter and through the lifecyle of a product,” the analyst reminds. “Not all changes have had the benefit (or detriment) of being newsworthy,” according to Wu.
Instead, Apple’s tightly-run supply chain has gotten even more efficient, improving capacity and doing a better job tracking inventory. But for consumers, the number of iPad 2s churning out of factories remains “well above expectations,” Wu told investors Tuesday.
Wu forecasts Apple selling 27 million iPads during the second quarter of 2011: 12 million in the September quarter and 15 million more in the December three-month period. That’s higher than the Wall Street consensus of 24 million to 26 million.
Suppliers often push out 25 percent to 33 percent more units than actually ship. Add in Apple’s concerns of having enough tablets to meet demand and you can see a 25 percent drop in production amid more efficient production and tracking can produce plenty of smoke, but little fire.
