Relax, iPad Build Plans Are Still Well Above Expectations
That’s the gist of another rebuttal to Hong Kong-based J.P. Morgan analyst Gokul Hariharan’s claim that the company is cutting orders to vendors in its iPad supply chain, this one from Sterne Agee’s Shaw Wu.
In a Tuesday morning research note, Wu added his voice to others seeking to correct the evidently mistaken impression that iPad demand is flagging, saying build plans for the device remain “well above expectations.”
Though reports of production cuts may have some merit, they’re no cause for concern, said Wu.
“From our understanding, these production cuts are due to much improved capacity and Apple actively managing its inventory in front of what is likely an iPad refresh in the March quarter,” Wu explained. “The iPad 2 started shipping in March 2011 making the product likely due for an update near its 1-year anniversary. We would also like to remind investors that production changes are common throughout a quarter and through the lifecycle of a product.”
In other words, the Monday morning scare that sent shares of Apple briefly downward was unmerited. Said Wu, “Our distributor checks indicate demand remains strong.” His estimates for iPad shipments in the second half of the year: 12 million in the September quarter and 15 million in the December quarter.