J.P. Morgan: Apple’s iPad 2 could burst bubble for would-be tablet rivals

“Analyst Mark Moskowitz of J.P. Morgan Research warned investors early Wednesday that build plans for tablet shipments from Apple’s rivals may be too high, presenting ‘increasing risk of a bubble burst’ in the second half of 2011,” Josh Ong reports for AppleInsider. “‘In our view, the technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan,’ Moskowitz wrote.”

“Using discounted build plan estimates to project tablet shipments for the year, the analyst claims that tablet makers will build approximately 65.1 million tablets in 2011,” Ong reports. “When compared against J.P. Morgan’s estimates of 47.9 million tablets sold this year, companies could find themselves with as much as 51 percent oversupply in a worst case scenario.”

Ong reports, “According to Moskowitz, component suppliers could stand the most to lose from a bubble burst. ‘Based on our research inputs, tablet makers eager to emulate Apple’s meteoric start are trying to secure components with inflated build plans,’ Moskowitz noted. ‘Of note, glass displays, processors, and, to a lesser extent, NAND Flash are the components that could be most at risk.'”

Read more in the full article here.

MacDailyNews Take: Pop!

[Thanks to MacDailyNews Reader “Lynn W.” for the heads up.]

10 Comments

  1. The tablet market is no “Field of Dreams”. Just because they build it, customers won’t necessarily come.

    As to supplies, Apple has first dibs on everything they need, because they’ve already made purchase commitments – often with cash up front. Heck, they’ve even put cash out there to help them build manufacturing capacity.

  2. Since Apple will build and sell about 40 million iPads this year we looking at an oversupply on the order of 200% for all the others. I just knew they would find a way to get the price of a tablet below $399. By xmas these things could be so cheap that the headlines will change to “Apple is so expensive” even as they outsell to others.

    My guess is that with all the product delays and cancelations 25 million pads of crap wont get built. However never underestimate the hubris of the executive.

    1. I would!

      Get a massive deposit for tooling. Build to order. Prepayment before shipment…

      Don’t care what size glass you want – just buy the stuff.

      Then pay me to collect it for assured destruction and recycling (not reuse).

      😉

      As Del-boy says, “this time next year Rodney, we’ll be millionaires!”

  3. Many of those tablet build “plans” will soon be drastically revised downwards, or even scrapped.

    The component suppliers will only be impacted to the extent that they ramp up for production beyond the guaranteed quantities booked by the tablet manufacturers. The real hit would take place in 2012 as they ramp down in some component areas to focus production on iPad 2 and iPad 3 needs.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.