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Tuesday, June 21, 2011, 12:50 pm PT (03:50 pm ET)

Apple reportedly 'demands' 10% price cut from key iPad suppliers as orders increase

Apple is said to be pressuring its overseas supply chain to reduce prices by 10 percent on component orders for the hot-selling iPad 2.

The iPad maker is said to have "demanded" suppliers cut their prices, as Apple believes they are due to cash in on surging sales of the touschreen tablet. According to DigiTimes, component makers reportedly expect Apple to ask for more cuts again in the third quarter of 2011.

"Since Apple's tablet PC shipments are expected to grow 70% sequentially to eight million units in the second quarter, significantly benefiting related upstream component suppliers, Apple has demand(ed) its suppliers to provide cuts in return," the report said, citing the Chinese-language Economic Daily News.

Apple has reportedly made the demands to companies that supply it with printed circuit boards, optical components, battery modules and touch panels. It wants quotes for the second quarter of 2011 to be cut by 10 percent.

Earlier this month, Apple revealed that total iPad sales had reached 25 million in just 14 months. That total also suggested that the company is on pace to exceed sales of 8 million iPad 2 units this quarter.

iPad 2


In its last fiscal quarter, Apple reported sales of 4.69 million iPads, a number that came in lower than Wall Street expectations of the iPad 2 launch. But the company's chief operating officer, Tim Cook, admitted that his company was struggling to meet demand, characterizing the situation as "the mother of all backlogs."

In March, it was suggested that supply issues for touchscreens could result in a higher cost to Apple for components. The touch display on the new iPad 2 was estimated to cost Apple $127 for each device, an increase of more than $30 from the first-generation iPad.