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Thursday, November 17, 2011, 04:43 am PT (07:43 am ET)

Apple reportedly reduced iPad 2 orders because it bought 16M last quarter

An overabundance of iPad 2 components purchased by Apple last quarter has allowed the company to actually draw down its orders ahead of the holidays due to an excess of parts, which will allow it to build between 4 million and 5 million units.

Last quarter, Apple sold a record 11.2 million iPad units, representing a year over year sales increase of 166 percent. But the company actually placed orders for components that could build between 15 and 16 million iPad units, according to DigiTimes.

Apple now has a stockpile of between 4 million and 5 million iPad 2 units in its supply chain, which has put the company in a position to adjust its orders for the current holiday quarter. Specifically, panel shipments for Samsung, LG and Chimei Innolux are said to be affected in the quarter.

"Due to inventory adjustments at Apple, LG Display saw its shipments of 9.7-inch panels to Apple decline from three million units in September to 2.5 million units in October," the report said. "Samsung managed to keep its shipments of 9.7-inch panels flat at two million units in October, while CMI slashed its shipments from 700,000 units to 350,000 units during the same month, said the sources."

While Apple is allegedly drawing down inventory for its current-generation iPad 2, the company is already gearing up for its third-generation iPad, expected to debut in early 2012. The report said that both Samsung and Sharp are already shipping panels for the next-generation iPad, while TPK Holding and Wintek are expected to ship panels for the third-generation tablet in November and December.

Earlier this month, the same publication indicated that Apple is stockpiling about 2 million third-generation iPad units by the end of 2011. The device is expected to be thinner and have a higher-resolution screen than the current iPad 2.

iPad 2


As for the rumored drawdown in purchases of iPad 2 components, Taiwan's Commercial Times claimed earlier this month that Apple had cut orders not only for the iPad 2, but also for the iPhone 4S, leading into the fourth quarter of calendar 2011. The report claimed that sales were not as high as Apple anticipated, and the company's stock subsequently dropped off.

But analysts on Wall Street dismissed concerns about the iPhone 4S, as the newly launched handset has been consistently selling out at Apple retail stores, while new international launches have drawn huge crowds around the world.