Rumor Mill: Apple cuts iPad component orders by 25%

Apple (NASDAQ:AAPL) has cut fourth-quarter orders for components for its iPad tablet by 25 percent, affecting vendors in its supply chain and potentially iPad sales, according to a report from analysts at J.P. Morgan Chase.

Click here for Apple's quarterly iPad shipments.

The report said that according to supply chain vendors Apple cut its orders by a quarter, the first time it has ever done so. Gokul Hariharan, one of the report's authors, told Bloomberg he couldn't comment on which companies will be affected, though Hon Hai, one of Apple's chief suppliers, likely will be. The report said that reducing the component orders could mean a drop in iPad shipments from 17 million in the third quarter to 13 million in the fourth quarter. However, the report said J.P. Morgan analyst Mark Moskowitz does not expect to lower his forecast of 10.9 million to 12 million units of iPad shipments in the third and fourth quarters. 

One theory for the cutback could be that Apple is simply responding to weakening global macroeconomic conditions. "It's back to reality," Wanli Wang, a Taipei-based industry analyst at RBS Asia, told Bloomberg. "Now it seems even for Apple, due to the market situation, we need to be conservative."

Apple sold nearly 14.8 million iPads worldwide in 2010 and another 12.6 million in the first six months of 2011. The report about Apple cutting production also comes amid speculation that will soon release its own tablet to compete with the iPad. Apple is not expected to unveil the third-generation iPad until sometime early next year.

The blog Boy Genius Report reported that while it may be true that Hon Hai is cutting production at its facility in China, it may be ramping up production out of another facility in Brazil, citing statements from Aolizio Mercadante, the Brazilian minister of science and technology.

For more:
- see this Bloomberg article
- see this BGR post

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