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

Posted:
in iPad edited January 2014
A pair of new reports have indicated that Apple is seeing less demand for the iPad 2, prompting the company to slash orders by 25 percent and potentially enact a price cut.



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. 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.



Apple was originally expected to order 17 million units in the fourth quarter of calendar 2011, but that number could now drop to 13 million units, the report said. It was suggested that reduced orders could reflect weakening demand in Europe.



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. It cited "market rumors" in claiming Apple plans to cut the price of the iPad 2.



Such changes would come as a surprise, as iPad sales for Apple have continued to increase, reaching a record 9.25 million units last quarter. JPMorgan analyst Mark Moskowitz still expects Apple to sell 10.9 million iPad units this quarter, and 12 million during the holiday quarter.



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 Apple to introduce such a model before 2012, as competitors have struggled to gain traction against the iPad.







Research from IDC has found that the iPad 2 actually took away market share from Android tablets shipped in the second quarter of calendar 2011. Apple represented 68.3 percent of the market, growing its share as Android dropped to 26.8 percent of shipped hardware.



Moskowitz also said last week that he sees Apple releasing a new low-cost iPhone, dubbed an iPhone "4-plus," this year to target midrange smartphone buyers, particularly in emerging markets like China. That aligns with the "market rumors" cited by DigiTimes on Monday, which suggested that a lower-priced iPad 2 would be joined by a new, cheaper entry-level iPhone from Apple.
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Comments

  • Reply 1 of 104
    There is something deeply fishy with these reports.



    A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:



    1. the report is complete BS spread by someone selling AAPL short.

    2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).
  • Reply 2 of 104
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by iCarbon View Post


    There is something deeply fishy with these reports.



    A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:



    1. the report is complete BS spread by someone selling AAPL short.

    2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).



    I concur with both your assessments.
  • Reply 3 of 104
    gatorguygatorguy Posts: 23,171member
    I'll try to find the related mention from a few days ago where some other (financial?) group said there were some signs that overall tablet demand may be falling. Way too soon to say so definitively IMO, or to determine why if it's true. Perhaps this is the "3rd quarter warning" that Apple mentioned in it's last financial call?
  • Reply 4 of 104
    Quote:
    Originally Posted by iCarbon View Post


    There is something deeply fishy with these reports.



    A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:



    1. the report is complete BS spread by someone selling AAPL short.

    2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).



    Remember this from a few years ago-



    http://www.businessinsider.com/2008/...-analyst-aapl-



    "Apple has cut its calendar Q4 iPhone production plans significantly more than originally estimated, according to a report by Friedman Billings Ramsey analyst Craig Berger."



    Apple released the iPhone 4 soon after. Apple is getting ready to into the iPad 3.
  • Reply 5 of 104
    I agree, the report sounds a little fishy.... However, I have noticed that supply is definitely up on the iPad2. Most stores around here have a good supply of all models. That has not been the case until recently...



    Of course, I bought the wife a Verizon 3G 64Gb model last weekend (22nd anniversary)... ( Worked better than jewelry... )
  • Reply 6 of 104
    IPad 3 is on its way.
  • Reply 7 of 104
    I think the report is either false and an attempt to make AAPL drop a few points before the iPhone announcement, or true, indicating a new iPad in the coming months.



    With Apple aggressively expanding into Asian markets I don't see this being a case of lower demand.
  • Reply 8 of 104
    Well it kind of makes sense, about 6 months after release you would think supply has met initial demand. Apple will have to come up with ways to make people upgrade as they will be competing against their former models like they faced with the iPod which was a lot cheaper purchase.
  • Reply 9 of 104
    If the price is really going down, I imagine it is because they know I recently bought one.
  • Reply 10 of 104
    Quote:
    Originally Posted by sranger View Post


    I agree, the report sounds a little fishy.... However, I have noticed that supply is definitely up on the iPad2. Most stores around here have a good supply of all models. That has not been the case until recently... )



    Is that supply considered shipped or sold?
  • Reply 11 of 104
    I smell bullshit.

    This is a last chance attempt to get cheap AAPL. Simple as.



    Don't be fooled.
  • Reply 12 of 104
    asdasdasdasd Posts: 5,670member
    demand could be down because Europe is massively depressed at the moment - the economic reality is hitting home. Apple will bounce back in 4Q. In any case the 17M orders were clearly top of the range for Apple, and 13M is still high.
  • Reply 13 of 104
    Quote:
    Originally Posted by iCarbon View Post


    There is something deeply fishy with these reports.



    A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:



    1. the report is complete BS spread by someone selling AAPL short.

    2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).



    Read the Reuters Link:



    http://www.reuters.com/article/2011/...7JM02Q20110926



    Excerpt:



    Quote:

    TAIPEI, Sept 26 (Reuters) - Taiwan stocks ended 2.4 percent

    lower on Monday, with Apple Inc plays as well as

    smartphone maker HTC tumbling.\t

    The main TAIEX index fell 169.10 points to 6,877.12,

    after opening down 0.28 percent.\t

    Electronics shares shed 2.5 percent, with Apple

    supplier and touch panel maker TPK Holding down 6.67

    percent, and touchscreen panel maker Wintek and camera

    module maker Largan Precision limit-down.\t

    HTC shed 6.04 percent. Computer maker Quanta

    however rebounded 3.95 percent, recovering from last week's

    loss. \t


    Financial shares were down 2.36 percent.\t

    The Taiwan dollar weakened 0.59 percent to

    T$30.566.





    It's clear that they are interpreting a downsize in demand because certain suppliers are reporting reduced forecasts. They should catch on sooner, rather than later that Apple is expanding it's contracts to other suppliers, yet announced.
  • Reply 14 of 104
    They must have rushed to get this out. They misspelled "Appel"
  • Reply 15 of 104
    sdw2001sdw2001 Posts: 17,672member
    Quote:
    Originally Posted by iCarbon View Post


    There is something deeply fishy with these reports.



    A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:



    1. the report is complete BS spread by someone selling AAPL short.

    2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).





    It's #1. Look at this:



    Quote:

    Apple was originally expected to order 17 million units in the fourth quarter of calendar 2011, but that number could now drop to 13 million units, the report said.



    Expected....by whom?
  • Reply 16 of 104
    irelandireland Posts: 17,751member
    Stock pump and dump.
  • Reply 17 of 104
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple was originally expected to order 17 million units in the fourth quarter of calendar 2011, but that number could now drop to 13 million units, the report said. It was suggested that reduced orders could reflect weakening demand in Europe.



    Total BS. This is just like what happened earlier this year. Some idiot analyst made up numbers for the first calendar quarter that were blatantly absurd. Their projections were that Apple would sell as many iPads in the first (calendar) quarter as they did in the Christmas quarter. Then, when Apple failed to sell that number, everyone was screaming about how demand for the iPad was way off.



    I'm sure the analyst doesn't have any idea how many iPads Apple was projection for the coming quarter. They're trying to cover their butts. They made up a ridiculous figure and are now trying to come up with a way to backpedal - without admitting that he pulled the numbers out of his butt.
  • Reply 18 of 104
    Quote:
    Originally Posted by EmperorsNewClothes View Post


    IPad 3 is on its way.



    Yes.

    Next year.



    A6 can't be produced in volume before Q1.



    TSMC 28nm revenue in Q4 is less then 3%. That is not enough to produce enough A6/AMD graphic cards/Nvidia graphic cards.



    There is also not enough Retina displays.



    BTW. The screen is the most expensive part on the iPad. An educated guess is that a retina display will be much more expensive. 4 times the pixels.
  • Reply 19 of 104
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by Ireland View Post


    Stock pump and dump.



    How do you pump a stock by saying that their sales are declining?
  • Reply 20 of 104
    More like pressures from Amazon could lead to a price drop, but I doubt they would devalue their product like that. It isn't that the iPad will sell LESS than the Kindle Tablet by any stretch of the imagination, it's that the Kindle Tablet will take away from the flame of the iPad. People are much more inclined to buy someone a $250 present than a $500 present. Personally, I haven't touched my iPad 2 in over 2 months; I'm hoping iOS 5 changes this.
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