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iPad Mini Manufacturer Sees Weaker Demand for the Tablet This Quarter [Updated]

Pegatron, a contract manufacturer for Apple that makes the iPad mini and the iPhone 4S, among other products, said today that its second quarter consumer electronics revenue will drop 25 to 30 percent from the previous quarter, reports Bloomberg.

The company says there is a decline in revenue from iPad mini production is "more on demand, while price has been stable", but CEO Jason Cheng also noted that "almost every item is moving in a negative direction" for the quarter. "Not just tablets, also e-books and games consoles".

The iPad Mini accounts for more than half of Pegatron’s consumer-electronics revenue, and the iPhone 4S contributes a majority of sales in the communications division, Cheng said.

"This is a bigger drop than we’d expected," said Vincent Chen, who rates the company buy at Yuanta Financial Holding Co. in Taipei. "We’re seeing strong indications from the supply chain that demand for iPad Mini will now fall 20 percent to 30 percent from the first quarter, instead of an earlier 15 percent estimate."
In its quarterly results report in April, Apple issued guidance for expected revenue for the June quarter of $33.5-35.5 billion, a drop in revenue of some 20 percent from the prior quarter.

Reports have indicated that mass production of the display for a Retina iPad mini should begin in June or July, for a planned release well into the third calendar quarter of 2013.

Update: Fortune reports that Pegatron CEO Jason Cheng has clarified the situation, noting that in no way did he indicate weakening iPad mini demand was responsible for the company's projected revenue decrease. The association with iPad mini demand appears to have simply been speculation by Bloomberg based on the device being responsible for a significant portion of Pegatron's consumer electronics division revenue. In an email to Fortune, Cheng wrote:
After the meeting, one reporter from Bloomberg approached me, trying to dig out detail numbers about some specific product. I clearly refused to comment on specific products, nor customers, even though he continued with other questions. I did say those words that he quotes me in the article "more on demand, while price has been stable"…, "almost every item is moving in a negative direction"...; "Not just tablets, also e-books and games consoles". But I did not say anything associated with any specific products.

"No indication, nor hint for specific products or customers" has been our principle and guideline for any public events such as investors conference. There are always speculations after these meetings.

Related Roundup: iPad mini 4 (2015)
Buyer's Guide: iPad Mini (Caution)

Top Rated Comments

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50 months ago
It's because people want retina iPad mini.
Rating: 42 Votes
50 months ago
because our demands lie with Mac Pros. duh.
Rating: 20 Votes
50 months ago
So Apple posts guidance that show a 20% decline and analysts are surprised when the drop looks to be about 20% instead of some arbitrary 15%......

Good heavens....
Rating: 12 Votes
50 months ago
If they released the retina mini today, I'd buy two without blinking an eye. I'm waiting. (and hopefully with A6)
Rating: 12 Votes
50 months ago
By now almost every family has a tablet, most people are upgrading instead of buying for the first time, demand is going to be less, i guess.
Rating: 8 Votes
50 months ago

i personally know 3-4 people that are holding out for the retina mini. this thing will sell like hot cakes!
Rating: 8 Votes
50 months ago

The executive does not actually say the cause is the iPad. Curiously, Bloomberg left "iPad mini" out of the specific quote attributable to the executive

Why is that?

Stock has been on a nice run, time to bring it down again with misleading reporting.
Rating: 8 Votes
50 months ago
Why is this news ? With all the analyst stating that a retina iPad Mini is coming out soon, why would anyone buy a Mini now ?
Rating: 5 Votes
50 months ago
It's the post tablet era now.
Rating: 4 Votes
49 months ago
The problem with the ipad mini, besides the non retina resolution, is that the market has caught up and there are very interesting competing products for someone to choose from. It's also way overpriced imho too, when most other products are priced much lower and/or include expandable storage via and sd card and/or feature a pressure sensitive stylus.

Also currently android has either surpassed or at least equaled ios. And the edge of ios in terms of the app ecosystem is more of a myth than reality, because actual usage scenarios show that the extra apps available for purchase on the app store are very seldom used.

It's a neck by neck battle right now in the tablet world and apple had better come up with something that adds value. A small overpriced tablet with poor screen resolution, without a pressure sensitive pen, a worse than average cpu and with seriously compromised storage isn't really a value proposition. But their momentum is good and hence the ipad mini is selling so far.

Misleading how?

Misleading investors with their mundane accuracy he means, as opposed to not misleading them with glorifying reports that might help push the stock up from the death dive it's taken the past few months.
Rating: 4 Votes

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