Analyst: Foxconn accident could drastically cut iPad 2 shipments

The tragic accident at Foxconn's plant in China on Friday that killed two workers could drastically affect the production of Apple's iPad 2 tablets, according to a financial analyst. PCMag.com reports that Mike Abramsky of RBC Capital is predicting that the accident could cause the loss of between 1.8 million and 2.8 million iPad 2 units in the third quarter of 2011. It was previously predicted that about 8 million iPad 2 units would be made in that quarter. That means that if Abramsky is correct, the production of iPad 2 tablets could be cut by as much as 36 percent. That also means that Apple could lose as much as $1.7 billion in revenue.

As we reported earlier this week, the explosion at a Foxconn plant in Chengdu, China on Friday took the lives of two Foxconn workers with 16 other workers reported as being injured. A lighting strike is the reported cause of the explosion which affected several floors in the Foxconn building. The structure is reportedly the "polishing plant" for the company.

Abramsky did say that it was possible that the Chengdu plant could be shut down for as little as a month. If that happens, the production of iPad 2 tablets would only be taken down by 1.3 million units in the third quarter of 2011. Still, the fact is that even with the plant running at full capacity, the demand for Apple's iPad 2 was still outstripping supplies. With the plant now shut down for an unknown period of time, this situation could affect Apple's revenue numbers.

Report a problem with article
Previous Story

Apple Store 2.0 launched in Australia [Update]

Next Story

Neowin Member Reviews: HTC Desire Z

30 Comments

Commenting is disabled on this article.

So in other words "could" = the analyst really has no clue if it will or will not, but lets go ahead and start the panic early.

xendrome said,
So in other words "could" = the analyst really has no clue if it will or will not, but lets go ahead and start the panic early.

pretty much the way all media outlets work

Why doesn't Apple force FoxConn to treat the companies better?
It's not hard, a little financial insinuative (or lack there of) can go a long way./..

Brian Miller said,
Why doesn't Apple force FoxConn to treat the companies better?
It's not hard, a little financial insinuative (or lack there of) can go a long way./..

Companies with decent working environments and workers with proper treatment and salary makes the products go up in price and at that point why would they bother building anything in China anyway?!

They (and by "they" not only Apple, virtually 90% of industrial products around you right now came from there) benefit greatly from the slavery that happens on China... actually not only they, we ALL benefit... actually not benefit, we all depend on those poor conditions greatly.

If one day China suddenly decides to cut loose of the rest of the world and/or starts treating their workers right (this one is not likely, at this point those living conditions became entrenched on most of the population) you better get ready for a REAL recession coming your way (not that half baked one we had a couple of years ago), the only reason this don't happen sooner is because China is loving the current situation. Their under valued currency helps exports, their multi national deals bring in new tech and the constant outsourcing of manpower makes every other country dependent on them.

...this is all without going into the merits or rare earth minerals which they hold a complete monopoly at least for the next decade and a few other factors that will surely sooner or later make mandarin as a mandatory curse on junior high ><

Another publicity stunt planted by Apple or Foxconn to hype up the product. Just like they did with the story about someone found the iPhone4 in a bar and sold it to Engadget. Boy we fell for that one.

Svggarden said,
Another publicity stunt planted by Apple or Foxconn to hype up the product. Just like they did with the story about someone found the iPhone4 in a bar and sold it to Engadget. Boy we fell for that one.

Apple raises public attention to poor safety conditions in its out sourced manufacturing chain / foxconn kills employees for positive publicity????!!!! This isn't good publicity.

MothBox said,

Apple raises public attention to poor safety conditions in its out sourced manufacturing chain / foxconn kills employees for positive publicity????!!!! This isn't good publicity.


I'm not necessarily agreeing that it's such a conspiracy but..this news will make consumers aware of the supply shortage and therefore increase hype.

Ghost_one said,
so a lightning strike could not have occurred in the USA ?

Pfft, no! All that amazing US made engineering is lightning proof.

You guys realize one main condition for a dust explosion is a high concentration of dust in the air, right? Pretty sure working conditions would not allow that as clearly that is unhealthy in itself.

Xenosion said,
That's what companies should expect when they outsource to other countries such as China.
Yeah, Chinese manufacturing plant explosions are as regular as the full moon.

virtorio said,
Yeah, Chinese manufacturing plant explosions are as regular as the full moon.

I'm pretty sure the only reason we're hearing about this is because it has to do with the iPad.

Xenosion said,

I'm pretty sure the only reason we're hearing about this is because it has to do with the iPad.
Yes, that is the only reason you're hearing about this, on a Tech website.

Who could of figured another reason for less supply for demand from apple to make an even bigger hype over a product...

What is going on at Foxconn? Some very disturbing things are happening there, not so long ago they had to sign 'no suicide' pledge, because someone killed themself there, now this...

Must be very bad karma...

WAR-DOG said,
What is going on at Foxconn? Some very disturbing things are happening there, not so long ago they had to sign 'no suicide' pledge, because someone killed themself there, now this...

Must be very bad karma...

.. or industrial sabotage.. go RIM!

WAR-DOG said,
What is going on at Foxconn? Some very disturbing things are happening there, not so long ago they had to sign 'no suicide' pledge, because someone killed themself there, now this...

Must be very bad karma...

I think it's probably always (or nearly always) been like this. It's just with the recent events happening there that we're hearing about in regard to the slave like conditions, paltry pay, and of course the high number of suicides with some of those even happening on campus. Combine that with the massive demand for Apple products which is undoubtedly pushing Foxconn's management to try to produce more product than possible. I'm sure Foxconn is scared to death of Apple going elsewhere and taking their billions of dollars worth of work with them which is a big part of the reason for the bad conditions for their workers which, as we know, is only one of the many events that keeps landing them in the public spotlight.

Dead'Soul said,
Foxconn became famous with apple iProducts. Most china manufacturers have this kind of problems...

I've seen Foxconn components on mobo's for years?

Dead'Soul said,
Foxconn became famous with apple iProducts. Most china manufacturers have this kind of problems...

Actually Foxconn became famous when Dell started getting all their motherboards made there, and there was a good number of problems with them... but that was years ago