Reduced iPad 2 orders from Apple viewed as a non-issue
A second report on Monday also cited sources in Apple's supply chain as saying that the company has apparently reduced orders for the iPad 2. But those claims from the Far East have not created concern for one Wall Street analyst, who believes demand for the iPad 2 remains while production may simply have been moved elsewhere.
Gene Munster with Piper Jaffray said Monday that he too has heard from Apple's supply chain that iPad 2 orders for the rest of 2011 have been reduced. However, he doesn't necessarily see that as an indication that Apple is experiencing reduced demand for its touchscreen tablet.
"While we have heard chatter of supply chain order reductions, the absolute sell-in figures for (the second half of calendar year 2011) likely remain well above our estimates," he wrote in a note to investors.
"We also note that previous calls based on sell-in or supply chain data have, for the most part, proven to have very little correlation with Apple's results vs. consensus dating back to early iPod shipments (2003)."
The analyst believes that Apple deliberately has multiple suppliers and manufacturing partners, which makes it difficult for industry watchers to draw conclusions based on one data point. He noted that Apple plans to assemble iPad units in Brazil by the end of this year, a transition that could explain reduced orders from the Far East.
Munster has maintained his forecast of 10 million iPad units sold in the September quarter, increasing to 12 million in the December quarter. Both would be new highs for Apple, besting the company's previous record of 9.25 million units.
Munster's details from his own supply chain sources come on the heels of a separate claim from JP Morgan Chase & Co., which indicated that Apple has allegedly reduced iPad 2 orders by 25 percent. The cut was said to have been enacted in the last two weeks, and would be the first reduction in orders that supply chain sources have seen for Apple's touchscreen tablet.
Gene Munster with Piper Jaffray said Monday that he too has heard from Apple's supply chain that iPad 2 orders for the rest of 2011 have been reduced. However, he doesn't necessarily see that as an indication that Apple is experiencing reduced demand for its touchscreen tablet.
"While we have heard chatter of supply chain order reductions, the absolute sell-in figures for (the second half of calendar year 2011) likely remain well above our estimates," he wrote in a note to investors.
"We also note that previous calls based on sell-in or supply chain data have, for the most part, proven to have very little correlation with Apple's results vs. consensus dating back to early iPod shipments (2003)."
The analyst believes that Apple deliberately has multiple suppliers and manufacturing partners, which makes it difficult for industry watchers to draw conclusions based on one data point. He noted that Apple plans to assemble iPad units in Brazil by the end of this year, a transition that could explain reduced orders from the Far East.
Munster has maintained his forecast of 10 million iPad units sold in the September quarter, increasing to 12 million in the December quarter. Both would be new highs for Apple, besting the company's previous record of 9.25 million units.
Munster's details from his own supply chain sources come on the heels of a separate claim from JP Morgan Chase & Co., which indicated that Apple has allegedly reduced iPad 2 orders by 25 percent. The cut was said to have been enacted in the last two weeks, and would be the first reduction in orders that supply chain sources have seen for Apple's touchscreen tablet.
Comments
I wonder if the Brazil facility will produce only for Brazil or if it will produce for all of South America, or perhaps even for both NA and SA....
Would be interesting if the whole thing ends up being about Brazil.
I wonder if the Brazil facility will produce only for Brazil or if it will produce for all of South America, or perhaps even for both NA and SA....
I've read that the combination of Brazil's high import taxes, advantageous export taxes to other Latin American countries, and the fact that Brazil represents fully half the Latin American market all make Brazilian manufacturing a natural to serve the SA market. Not sure about NA.
I'd agree with Munster on this one. I have no doubt iPad2 sales (or iPad3) will continue to outpace predictions whatever these reports some think they have dug up on manufacturing numbers to prove otherwise.
I don't agree with him...
10 million for this current quarter and 15 million for the holiday quarter.
Of course some folks will call the above statements as Fan Boy stuff...
The real AAPL investors already know all of the above!!!
I don't agree with him...
10 million for this current quarter and 15 million for the holiday quarter.
I agree with you!
Of course it's Brazil and supply chain management that means nothing toward the end sakes results. And if you read the "reports" and "news" it's all hear say.
So right before an expected jump in AAPL a scare is induced so that some people can buy in lower...
The iPad 2 is addictive and s/he who tries one never goes back and sells it to friends and relatives.
Apple is on the verge of a sales explosion in China, India, Russia and Latin America both with the iPad and a cheaper iPhone together with the iPhone 5.
The iPhone is outdoing&killing game consoles, the next victim will be point-and-shoot cameras.
Believe you me, when the iPhone and/or the iPad start showing signs of peaking, that's surely when Apple will put out the 40"-50" line of Apple HDTV (which will be like a mix between a giant iPad and iMac, remotely controlled via iPhone or iPad).
This kind of management is the reason why Apple has taken so long coming out with a 2nd iPhone model. It's all about keeping the Apple machine at its optimum yeld/efficiency. And I'm pretty sure Cook is a master at that!
Didn't Moskowitz last week raised the target price on Apple last week and today this non-sense? What a bunch of BS? Why do some of this analyst think everyone operates like a daily trader? I am sure Apple doesn't made random changes. Maybe someone was right - JPM was pumping last week and not putting in a scare to get the price lower so that they can acquire more - Bastards!
Just the normal pps losers .
I don't agree with him...
10 million for this current quarter and 15 million for the holiday quarter.
Ok ... amended ... =/> Munster
Bottom line (in case you're a slow learner): NEVER trust a banker.
Most poignant point seen in a long while, hholbein.
Be self-reliant. A banker’s job is not to make you money; the market does that. Regardless, all money managers lay claim to safe and assured but your returns are diminished by their cut which is taken first, regardless your portfolio’s performance.
Spend the time to be informed and don’t be in a rush.
Know the histories of a group of stocks & investments.
Know the markets, the times, the seasons, the patterns.
But foremost, heed hholbein's advice. Never, never sit back and trust anyone to manage your money. Once you are out of the chair, your are out-of-mind. You must continue to be: informed, involved, incharge.
And read hholbein again, right now.
Do you think they didn't know exactly when Amazon would release their tablet? And do you think it's coincidence that iPad sales are "slowing down" before the lucrative holiday season?
You heard it here: iPad 3 this year.
They issue an updated note.
Just wait and see.
What is happening is that Apple is anticipating the release and subsequent popularity of the impending Amazon tablet. Since Apple has a nimble and efficient supply chain, they are phasing out the iPad 2 and are quickly starting the assembly lines on the iPad 3 (hello new factory in Brazil; picture the Brazilian assembly line workers doing the samba as they work).
Do you think they didn't know exactly when Amazon would release their tablet? And do you think it's coincidence that iPad sales are "slowing down" before the lucrative holiday season?
You heard it here: iPad 3 this year.
Respectfully, I disagree, for a couple of reasons.
1. The Amazon tablet due this year won't directly compete with the iPad. It's a different form factor, more akin to the Nook. They won't need to bump the iPad version until next year.
2. This "slowdown" is because Apple finally caught up with the increasing demand, and exceeded it. They now have they luxury of idlng some capacity and holding it in reserve in case the new production capacity in Brazil can't handle the holiday season demand. This will be revealed in a few weeks when they disclose iPad sales for their 4th fiscal quarter that completely blow away expectations.
What is happening is that Apple is anticipating the release and subsequent popularity of the impending Amazon tablet. Since Apple has a nimble and efficient supply chain, they are phasing out the iPad 2 and are quickly starting the assembly lines on the iPad 3 (hello new factory in Brazil; picture the Brazilian assembly line workers doing the samba as they work).
Do you think they didn't know exactly when Amazon would release their tablet? And do you think it's coincidence that iPad sales are "slowing down" before the lucrative holiday season?
You heard it here: iPad 3 this year.
I disagree. iPad 2 is more than capable of rounding out a huge holiday quarter. iPad 3 will be held until next year. And then plenty of iPad 2s will hit ebay and people will trade up for a 3.
I don't see Amazon delivering a significant competitor with their first tablet. They have pieces others lack, but they aren't perfect. I find their web site confusing, cluttered, and user-unfriendly.
I haven't seen anyone comment on Amazon skipping the phone market and going straight to tablets.
I disagree. iPad 2 is more than capable of rounding out a huge holiday quarter. iPad 3 will be held until next year.
We know this. You don't need to argue it against anyone. Anyone banking on iPad 3 this year is going to be wrong. I do expect a price drop to $399 though. That would be smart.