Apple iPad Shortages Feared Following Foxconn Plant Explosion

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Following the deadly explosions at Apple assembly plant Foxconn on Friday, an analyst has predicted that iPad production could drop as much as 36 percent in the third quarter.


Analyst Mike Abramsky of RBC Capital wrote that iPad production could drop 1.8-2.8 million units, against an estimated third quarter (June-September) production run of 8 million units, or 22-36 percent. This would impact Apple revenue by $1.1-1.7 billion, Abramsky noted, according to CNN.

A less grave scenario, Abramsky said, was that the Chengdu plant would only be down for a month, decreasing iPad supplies by about 1.3 million units in the third quarter.

Foxconn's Chengdu factory reportedly has 52 iPad production lines and is said to be able to produce more than 40 million units a year. But yesterday an explosion ripped through the facility's "polishing plant" at around 7 p.m. local time, killing two people and injuring 16.

Foxconn's troubles are well-documented, ranging from a string of factory worker suicides in 2010 to charges against three employees for allegedly leaking iPad 2 designs to third-party accessory suppliers. In May, Taiwanese newspaper DigiTimes reported that labor and part shortages at the Chengdu factor could lead to shipment delays for the iPhone 4 and iPad 2.

Since its launch, Apple hasn't been able to keep up with demand for the iPad 2. In its first quarter earnings call Apple reported a sharp decline in iPad, down 4.69 million units from 7.33 million the quarter before. Chief operating officer Tim Cook called it "the mother of all backlogs."

Posted by Alain.co @ Monday 23 May 2011 0 comments

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