JPMorgan Chase analyst Mark Moskowitz says research from his colleagues in Asia about a cut in iPad orders doesn’t represent the views of the securities firm’s US team, and that “Apple is fine”.
Apple is cutting orders to vendors in the supply chain for its iPad tablet computer, a move that may mean slower sales for companies including Hon Hai Precision Industry, according to the earlier report by JPMorgan analyst Gokul Hariharan.
Apple’s stock fell as much as 3.2 per cent in Nasdaq Stock Market trading today after the report.
Competing analysts released research that differed with JPMorgan’s findings. Chris Caso, an analyst at Susquehanna International Group, said the resulting “chatter” was “misleading” and Gene Munster, at Piper Jaffray, said changes in orders may be the result of Apple moving some iPad manufacturing out of Asia to Brazil.
Barclays Capital also said it didn’t agree with market “chatter”.
“We believe iPad 2 shipments for the third and fourth quarters have not been cut,” analysts led by Kirk Yang wrote in a report dated yesterday, citing checks with component suppliers and assembler Hon Hai Precision Industry Co. They maintained a forecast for iPad 2 shipments to increase by 40 per cent to 50 per cent quarter-on-quarter in the fourth quarter.
“The numbers being circulated Monday might be related to components and not to actual iPad 2 shipments,” they wrote.
The earlier report “has the equity markets worried about Apple”, Mr Moskowitz wrote overnight. “Mr. Hariharan’s report focuses on how Hon Hai could be impacted by potential iPad sell-in order cuts. This alert is not the view of the US IT Hardware team.”
Mr Moskowitz maintained his projection that Apple will sell 10.9 million to 12 million iPads in the fiscal fourth quarter.
Apple, based in Cupertino, California, fell $US1.13, or 0.3 per cent, to $US403.17 in Nasdaq Stock Market trading after earlier declining to $US391.30. The shares have gained 25 per cent this year.
Unprecedented cut
Mr Hariharan’s report, dated September 25, said multiple supply- chain vendors indicated a 25 per cent reduction in so-called sell-in orders in the past two weeks, the first such cut that analysts at JPMorgan’s electronic manufacturing services team in Hong Kong said they have seen. Sell-in orders are those made by a company - in this case, Apple - to a supplier.
Mr Moskowitz and Hariharan declined to comment beyond their respective reports. Steve Dowling, a spokesman for Apple, declined to comment. Edmund Ding, spokesman for Hon Hai, didn’t respond to an e-mail or answer calls to his Taiwan and China mobile phones.
Apple’s iPad may account for 73 per cent of tablet sales this year, according to research firm Gartner Inc. Products that run on Google’s Android operating system, including Samsung’s Galaxy tablets, will probably have about 17 per cent of the market, Gartner said on September 22.
Amazon may release a product later this year that could become the No. 2 tablet in the market behind the iPad, Mr Moskowitz wrote in a report earlier this month.