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Foxconn ‘Slowdown’ May Mean iPad Supply Headaches are Ahead

If you want to gauge future auto output, you could check how many cars are coming off Detroit’s production lines. A similar check has prompted one analyst firm to reduce its revenue estimates for Apple. A “notable” drop in production at iPhone manufacturer Foxconn could result in fewer products available to consumers.
After hitting 84 percent year-over-year growth in December, the manufacturer grew just 37 percent in January and 26 percent in February, according to JMP Securities. Growth is “tracking well below” 70 percent salesgrowth for the March quarter, and 50 percent in June, analyst Alex Guana told investors Wednesday.

Possible causes for the growth slowdown “could include simply in-line iPhone sales due to more significant Android competition, weakness in computing products as tablet demand grows and/or product transition risk around iPad 2,” the analyst announced. As a result, the analyst scaled-back his estimates for second-quarter revenue to $22 billion, down from $23 billion. Wall Street forecasts Apple will announce $23.1 billion revenue. Apple’s guidance is for $22 billion.
Guana also noted what he called investor “complacency,” despite Apple’s long-running habit of beating earnings expectations by an average of 23 percent. “Recent Street commentary appears biased towards the momentum continuing, with most numbers moving higher around the CDMA iPhone and iPad 2 launches where clear demand trends have yet to emerge,” the analyst said.
The analyst comments come amid growing reports Apple is having trouble supplying inventory to meet demand. Online orders reportedly now come with a waiting period spanning four to five weeks. Another issue is the impact the tragedy in Japan may have on tech companies, such as Apple. The Cupertino, Calif. firm gets 6 percent of its product sales from the island nation, as well as parts such as NAND flash and hard disk drives.