In J P Morgan Chase has released a report saying that Apple 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.
Gokul Hariharan, who JP Morgan's Asia Pacific electronic manufacturing services analyst, said, Our understanding is that this is not in preparation for a new model launch. This production cut by Apple is the first such cut that analysts at JPMorgans electronic manufacturing services team in Hong Kong said they have ever seen.
The concerns for a slowdown in iPad tablet sales have emerged as Amazon.com is expected to unveil its own tablet rival on Wednesday. Many analysts have already expressed the opinion that the Amazon device could be the "game changer" in the tablet space and could pose as a significant challenge to the iPad.
After the release of the J P Morgan Chase report, Apple shares fell as low as $391.30, or 3.3 percent, before closing down 0.28 percent at $403.17 on Nasdaq. Hon Hai fell NT$0.40 to NT$68.60 on the Taiwan Stock Exchange.
So far Apple has declined to comment on the news of up to 25 percent reduction in fourth quarter iPad orders. The reduced orders from Apple to iPad suppliers could as well be a reflection of both weakening demand in Europe due to economic conditions. But there is also the possibility that Apple might have crafted a strategy for operating with reduced inventory.
In the reported released on September 22, Gartner had said that Apples iPad may account for 73 percent of tablet computer sales this year. Gartner had also said that the tablets running on Google Android OS, including Samsung Electronics Co.s Galaxy tablets would probably have about 17 percent of the market.
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