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Apple suppliers reap iPad 2 benefits, positive news expected to continue


Overseas suppliers for Apple products saw a surge in sales in the month of March, as demand for the iPad 2 created the need for a steady supply of components.

Sales for Apple touch panel supplier Wintek increased 40 percent month over month, well more than the average 16 percent increase Wintek has seen in March in years past. Analyst Brian White with Ticonderoga Securities said Wintek's success helps to give an indication of how strong the debut for the iPad 2 has been.

"We believe Wintek's March sales surge highlights the strong ramp for the iPad 2, and we expect to get more details from the Apple supply chain over the next week as monthly sales from TPK and other suppliers are released," White wrote.

The analyst has predicted that Apple will sell 27.4 million iPads in the company's 2011 fiscal year, growing even more to 37.5 million in fiscal year 2012. But he said Wintek's strong performance in March is yet another indication that those numbers are "very conservative."

But White also cautioned that investors should note that the iPad 2 launched in the U.S. nearly a month before the first-generation tablet went on sale last April, which likely accounts for some of the uncharacteristic growth. In addition, it Wintek's market share of iPad 2 components remains unknown, and the total could be more or less than last year's model.

Still, White expects positive news surrounding the iPad 2 to continue, particularly with the recent launch of the iPad 2 in 25 new countries, and debuts in Hong Kong, Korea, Singapore and other countries slated for April.

"Essentially, the iPad 2 was available in 26 countries before the end of March this year versus 19 countries for the iPad 1 by the end of July 2010, and 25 countries by the end of September 2010," he said. "We believe the iPad 2 momentum at the end of March positions Apple well to benefit from a healthy uptick in demand for the iPad 2 in the June quarter.

"Given the continued iPad 2 stock-outs around the world, we expect the news flow surrounding the iPad 2 to remain positive over the next several weeks."

Apple has not yet released sales figures for the iPad 2, leaving investors to look for answers in other places, such as component suppliers. But Apple will reveal its iPad 2 sales for the second quarter of fiscal 2011 during its earnings call scheduled for April 20. The call will take place at its standard time of 5 p.m. Eastern, 2 p.m. Pacific.