Apple Falls on iPad Launch Delay Speculation

Tuesday, 22 Feb 2011 10:07 AM

 

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Apple Inc. shares fell 2.4 percent after a brokerage firm said the next version of its iPad tablet computer will be delayed as maker Hon Hai faces production bottlenecks due to the device's new design.

Taiwanese brokerage Yuanta Securities said in a note the next version of iPad would come out two months later than last the first version, which launched in April last year.

"Our checks suggest new issues are being encountered with the new production process and it is taking time to resolve them," Yuanta's head of downstream tech equities, Vincent Chen, wrote in the note on Tuesday.

According to the note, component makers had to change their production processes after Apple made design changes to the iPad2 before the Lunar New Year at the beginning of February.

Hon Hai declined to comment on the note. Apple was not immediately available for comment.

The note said if the launch of the iPad2 is delayed by two months, total iPad shipments would be 23 million units this year, down from the broker's original forecast of 30.6 million units.

Morgan Keegan analyst Tavis McCourt said investors were overreacting to Yuanta's note, adding that even if a late launch hurts second quarter sales, he is not changing his expectation for full year sales of 27 million iPads.

"My guess is if it is delayed it is because they're getting new features in there so it could be worth a two month delay," McCourt said.

Manufacturing sources have previously said the new model would have cameras on the front and and back of the device and would be slimmer, lighter and have a better resolution display than the first iPad.

Apple shares were down 2.4 percent, or $8.45, at $342.11.

© 2014 Thomson/Reuters. All rights reserved.

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