Apple iPad production hit by 'manufacturing bottleneck' - report
By Neil Hughes
Published: 10:05 AM EST
Availability of Apple's forthcoming iPad may be limited when it launches later this month, due to an "unspecified production problem" that could restrict the number of shipped units to just 300,000.
In a note to investors issued Monday, analyst Peter Misek with Canaccord Adams said the issues could limit the initial launch to be in the U.S. only. He also speculated that Apple could even delay the launch of the iPad by a month due to alleged production issues.
"The upcoming iPad launch may be somewhat limited as a manufacturing bottleneck has impacted production of Apple's newest device," Misek wrote. "An unspecified production problem at the iPad's manufacturer, Hon Hai Precision, will likely limit the launch region to the US and the number of units available to roughly 300K in the month of march, far lower than the company's initial estimate of 1,000K units."
"The delay in production ramp will likely impact Apple's April unit estimate of 800K as well. It is also possible that, given the limited number of units available in March, the launch will be delayed for a month."
Given the potential constraints, Misek believes Apple will sell 550,000 units in its third financial quarter of 2010, which ends in June. The lower numbers do not reflect lesser demand, but are simply due to the prospect of a production delay.
Misek believes that Apple will sell 1.2 million iPad units in its 2010 fiscal year after all production issues are alleviated. He has forecast sales of 3.5 million iPads in the company's 2011 fiscal year. Those predictions fall in the middle of Wall Street's expectations of between 1 million and 5 million iPad sales in the first calendar year.
"We believe that the only material impact from the iPad delay could come in the form of frustrated consumers and some modest loss of lustre for the company's product launch," he wrote.
