iPad mini Parts Orders Hint at Weaker Sales… Maybe

| Analysis

A new report surfaced Wednesday claiming that Apple is cutting its iPad mini orders from 12 million units down to 10 million for the second quarter. Regardless of whether or not the company is scaling back shipments, it's not time to freak out yet.

A few parts supply leaks doesn't spell doom for the iPad miniA few parts supply leaks doesn't spell doom for the iPad mini

According to supply chain sources talking to DigiTimes, Apple has cut back on parts orders enough to account of a potential 20 percent reduction in April shipments -- and therein lies the problem. Building a tapestry from the threads parts suppliers hand out doesn't mean you're constructing an accurate picture of Apple's plans.

While scaling back on parts could be happening, Apple isn't talking about its behind the scenes plans, nor does it mean that parts orders are being cut across the board. Apple may have intentionally over-ordered parts and is now adjusting to meet actual needs.

Assuming Apple doesn't need as many iPad minis this quarter, there are a few reasons why that could be happening, and they aren't all bad. The company could, for example, be scaling back on parts for the current model while it ramps up for the second generation iPad mini. The company may also be adding in more suppliers, which in turn could lead to lower demand for current parts companies.

On the less positive side, Apple may be seeing weaker than anticipated demand for the iPad mini, which isn't necessarily the same thing as losing sales to Android-based tablets. That said, it's possible some customers that otherwise would've bought an iPad mini were swayed into the Android tablet camp, cutting into Apple's potential sales.

Regardless of whether or not iPad mini orders have been cut back for the quarter, there isn't any solid proof that sales are hurting -- and considering the DigiTimes track record of relying on nothing more than isolated information from parts suppliers for many of its reports -- there's no need to jump the gun and start worrying about Apple's sales now. It's the company's quarterly earnings reports that tell the real story, and if those numbers are significantly down it'll be time to start asking why.

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Comments

Lee Dronick

China isn’t happy with Apple and has gone so far as to start a public news campaign claiming the company doesn’t treat its citizens as well as customers in other countries.

Are the parts suppliers in China? I suspect that Apple may be declaring victory and withdrawing from the Country and China isn’t liking that. Remember the story a few months ago about Apple building stuff here in the USA.

daemon

Remember the story a few months ago about Apple building stuff here in the USA.

Yes, I do remember, however Apple isn’t fabricating the parts in the US.

Lee Dronick

Yes, I do remember, however Apple isn’t fabricating the parts in the US.

Not yet

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