Apple has been in a very weird position lately, being one of the most valuable companies in the world and a leader in the technology industry but at the same time losing important mindshare with its consumers and losing confidence with its investors.
A few days ago Apple stock went below $500 for the first time due to reports of cancelled part orders for its iPhone 5 device. This seemed to point at not only a seasonal decline in sales but a rather larger, more alarming trend where consumers are slowly starting to move away from the Cupertino company.
Now Reuters is reporting that the same thing is happening with 9.7-inch iPad screens, with sources saying that there has been a gradual slowdown in production at all of Apple’s major suppliers.
The biggest of these slowdowns seems to be happening at Sharp Corp in Japan, where production levels have been reduced to their minimum level that still keep the line running. The other two manufacturers Samsung and LG, have also seen a dip in demand. However, these can be attributed to Apple distancing themselves from Samsung, one of their biggest rivals, as well as weak season demand which was expected for the first quarter of 2013.
This slowdown doesn’t mean that Apple is really in trouble, at least not yet. One of the main reasons behind it is that Apple’s smaller iPad Mini is cannibalizing their own market. According to Macquarie Research the iPad shipments in this quarter will decrease by nearly 40% compared to last year’s Q4, but Apple’s total tablet shipments will show a much smaller decrease due to strong iPad mini sales.
Another reason why this is happening might be that Apple is simply going through its inventory and preparing for a new device launch. However with the refresh of the iPad line barely a few months ago this seems to be somewhat unlikely unless Apple’s new regular iPad has had a much weaker demand than expected.
As of now Apple stock is again below $500 hovering at $499. However things might change, for better or worse, next week when Apple discloses its financial results for Q1 of 2013.
Source: Reuters | Image via Techspot