Analyst: Apple reduces iPad 2 orders by 25%, could drop price

“In a report issues to investors this week, JPMorgan Chase & Co. indicated that Apple has cut fourth-quarter iPad orders from its overseas supply chain by 25 percent, according to Bloomberg,” Sam Oliver reports for AppleInsider. “Sources in the supply chain said the cut was enacted in the last two weeks, and it is the first such one from Apple they have ever seen.”

“The claims from JPMorgan come as a separate report from DigiTimes also made mention of a ‘slowdown in global demand’ prompting Apple to follow a market shift toward lower prices,” Oliver reports. “It cited ‘market rumors’ in claiming Apple plans to cut the price of the iPad 2.”

Oliver reports, “JPMorgan analyst Mark Moskowitz said in a note to investors earlier this month that Apple already has prototypes for a third-generation iPad in its supply chain. But he doesn’t expect Appel to introduce such a model before 2012, as competitors have struggled to gain traction against the iPad.”

Read more in the full article here.

MacDailyNews Take: Cough – bullshit – cough. Please see related article: There are no iPad cuts; some production has moved to Brazil

– September 26, 2011

[Thanks to MacDailyNews Reader “Edward Weber” for the heads up.]

Related articles:
Foxconn begins Apple iPad assembly in Brazil – September 14, 2011
Brazil’s president slashes taxes to lure iPad production jobs – May 18, 2011
Foxconn to assemble Apple iPhones and iPads in Brazil; Mac production a future possibility – May 3, 2011


  1. Scare tactics

    This story came across bloobmerg this morning and only mentioned chineese ipad suppliers. It fails to mention the new ipad factory in Brazil which is ramping up production for December delivery. The reduction in orders is likely Apple moving iPad production to Brazil to free up Chinese resources for iPhone 5/4s production.

    —————-Original Story————————–
    Apple Cutting IPad Supply Chain Orders 25%, JPMorgan Says (2)
    2011-09-26 11:27:33.409 GMT

    (Updates with German stock trading in eighth paragraph.)

    By Bloomberg News
    Sept. 26 (Bloomberg) — Apple Inc. is cutting orders to
    vendors in the supply chain for its iPad tablet computer, a move
    that may result in slower sales for companies including Hon Hai
    Precision Industry Co., JPMorgan Chase & Co. said in a report.
    Several supply-chain vendors indicated in the past two
    weeks that Apple lowered fourth-quarter iPad orders 25 percent,
    the first such cut that analysts at JPMorgan’s electronic
    manufacturing services team in Hong Kong said they have ever
    seen. The report didn’t list the affected companies, and Gokul
    Hariharan, one of the report’s authors, said he couldn’t comment
    when reached by Bloomberg News today.
    For a vendor such as Hon Hai, the cut could mean a drop to
    13 million units in the fourth quarter from 17 million units in
    the third quarter, JPMorgan analysts wrote in the Sept. 25
    report. The report said JPMorgan U.S. analyst Mark Moskowitz,
    who covers Apple, does not expect to lower his projection of
    10.9 million to 12 million units of iPad shipments in the third
    and fourth quarters after the supply chain adjustments.
    Reduced orders from Apple to iPad suppliers could reflect
    both weakening demand in Europe due to economic conditions there
    as well as a strategy by Apple, the world’s biggest company by
    market value, to operate with reduced inventory, Wanli Wang, a
    Taipei-based industry analyst at RBS Asia Ltd., said today.
    “It’s back to reality,” Wang said. “Now it seems even
    for Apple, due to the market situation, we need to be

    No Confirmation

    So far there is no confirmation from Apple that it has
    reduced orders to suppliers, Wang said. Carolyn Wu, a Beijing-
    based spokeswoman for Apple, didn’t respond to calls for comment
    on the report today.
    Edmund Ding, spokesman for Hon Hai, didn’t respond to an e-
    mail or answer calls to his Taiwan and China mobile phones.
    Shares of the Cupertino, California-based iPad maker fell
    1.5 percent to the equivalent of $400 at 1:25 p.m. in German
    trading. The stock rose 0.6 percent to $404.30 on the Nasdaq
    Stock Market on Sept. 23.
    Apple’s iPad may account for 73 percent of tablet computer
    sales this year, according to research firm Gartner Inc.
    Products that run on Google Inc.’s Android operating system,
    including Samsung Electronics Co.’s Galaxy tablets, will
    probably have about 17 percent of the market, Gartner said in a
    Sept. 22 note.
    Because of its current dominant market position, Apple
    doesn’t have to rush to introduce its iPad 3 tablet computer as
    potential rivals have failed to emerge to siphon sales from the
    current model, JPMorgan’s Moskowitz wrote in a Sept. 16 report. Inc. may release a product late this year that
    could become the number-two tablet in the market behind the
    iPad, Moskowitz wrote in that report.

    For Related News and Information:
    Top Stories: TOP
    Top Technology Stories:TTOP
    Apple’s sales breakdown: AAPL US PGEO

    –Edmond Lococo, with assistance from Janet Ong in Taipei.
    Editors: Nicholas Wadhams, Garry Smith.

    To contact Bloomberg News staff for this story:
    Edmond Lococo in Beijing at +86-10-6649-7507 or

    To contact the editor responsible for this story:
    Young-Sam Cho at +81-3-3201-3882 or

  2. Why are these guys being given a forum when all of this is pure conjecture? Issuing an opinion is one thing, putting numbers to something they cannot substantiate with reliable sources is quite another. This is how a stock gets manipulated. Watch and see, this BS will be reprinted in every major news outlet. Also, isn’t JPMC one of the companies that couldn’t see the frailty of mortgage backed securities? Why are these guys given any credibility at all?

    1. Does anyone else have trouble remembering this acronym? For the life of me I can’t keep this one sorted out.

      Reminds me too much of FOD from my Navy days. Stands for Foreign Object Damage: when launching aircraft, there is always a danger of jet engines ingesting bits of debris on takeoff.

      Come to think of it FOD my not be all that far off from FUD !

  3. Cutting back production at the already overworked China plants by 25% (if that’s even true) but adding another plant in Brazil still equals an increase in overall production.

    And the rumors of price cuts are hogwash. To cut production AND cut prices would only take place if a catastrophic drop in consumer demand occurred, which is no happening.

  4. iPads off 25% or they can’t read Brazilian production yet? You have to love these clueless idiots that need to submit an article all the time.

    Today we read: “Apple down on report of iPad supply slowdown”

    And yet we know : “Foxconn begins Apple iPad assembly in Brazil” (iPad production BEGAN “in late August / early September” )

    Foxconn begins Apple iPad assembly in Brazil

    So, it was “confirmed during a hearing with the Commission of Economic Affairs that the new factory in Jundiaí is “ready”, and already making iPads that will begin shipping in Brazil starting this December,”

    Maybe the sources are not able to see the full picture yet. Did they add the production from Brazil to there UNOFFICIAL GUESS!


  5. Hmm, what about the possibility that Apple is drawing down the iPad 2 to begin production of the iPad 3.

    But yes, this is probably just BS. The iPad 2 just caught up with demand a few weeks ago, and now we’re heading into the Christmas season. No way that demand is going down in the last quarter of 2011.

  6. No. No they don’t. If you have a screaming success you especially do not do this! I’m wondering if the Brazil operation has anything to do with this? I mean Damn! They’re selling like hotcakes or so we’ve been told so far. I guess it could be the overall economy being in such dire straits? Whatever it is it was a buying op this morning. Gone back up $5 in the last few minutes. Don’t need bad news going into earnings. AAPL going into earnings is gut wrenching enough without extra bad news in advance. Maybe it’s just Brazil?

  7. Sure, iPad is cool. But, it’s not a computer – even if you connect it to a keyboard it’s still not. After fooling around with the gadget, and others trying to be like it, the realization that you need a real computer begins to sink in. Results – the frenzy to have to have one inevitably begins to decline. Rave on but here we are.

    1. So who gives a toss if it’s a computer or not. Most people have no need for a conventional computer, and buying an iPad frees up space that a computer uses up in the home. With iOS 5 coming a computer is even less necessary as all updates will be downloaded directly to the devise, no tethering will be required, plus iCloud will offer a back-up facility. Of course, a full spec computer is still useful, so a Mac Mini plugged into a TV does the trick. It’s what I’ve done, plus I replaced the optical drive with a HDD, got an outboard disk writer, and had an extra 2Gb of RAM added. With iCloud and iOS 5 I’m covered all ways.

  8. Why does anyone even believe this is true? Digitimes is so fantastically inaccurate MDN couldn’t even iCal the because there would be no room on their calendar. Now one of the big Wallstreet banks picks up the rumor second or third hand and off we go again. Apple is down by almost 5 dollars on pure conjecture. Amazing. Thank God that when this rumor proves insubstantial, Amazon will have announced their anemic iPad killer. What a joke!

  9. JP Morgan’s supply chain analyst is NOT the same guy who covers Apple. He’s bound to get it wrong, just like Craig Berger of FBR who, as a chip analyst, got a whole bunch of Apple chip rumors wrong.

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