Apple seems to be controlling inventory, not reacting to a slow-down in sales
Apple's (aapl) stock price fell sharply last week after some confused reports out of China and Taiwan regarding the company's communications with its supply chain. The first report was that Apple had cut back orders 10% to 15% on parts for the iPad 2 and the iPhone 4S because, according to Taipei-based DigiTimes, "sales of the iPhone 4S have not been as strong as those concluded in the pre-sales period."
After a flurry of analyst reports pointing out that iPhone 4S sales were, if anything, stronger that expected, a consensus developed that it was not the iPhone but the iPad that was showing weakness, perhaps because of publicity surrounding the launch of Amazon's (amzn) Kindle Fire.
Now DigiTimes has issued a clarification of sorts. If Apple has cut back on iPad component orders -- and several manufacturers of 9.7 inch panels indicate that they have -- it's not because iPad sales have slowed, but because Apple is controlling inventories in advance of the launch of a new iPad.
Citing unnamed "sources," DigiTimes reports:
Sales of iPads at the end market totaled 11.12 million units in the third quarter of 2011, according to data released by Apple. However, inventories of parts and components prepared by the makers in the supply chain for the production of iPad 2 in the quarter are sufficient for the production of 15-16 million iPads, leaving a stockpile of 4-5 million units of iPad 2 in the supply chain, the sources noted.
While Apple is adjusting panel inventory for iPad 2, Samsung and Sharp already began shipping panels for the next-generation iPads to Apple in October, and Taiwan-based touch panel makers TPK Holding and Wintek will begin to ship touch panels for the new iPads to the supply chain in November-December, the sources noted.
Given DigiTimes' track record, take even this with a grain of salt.