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Apple shares dip on report iPad orders slashed by 25 per cent

Outsourcing is crucial to Apple -- the company is set to generate about $110-billion of revenue this fiscal year, mostly from hardware, out of about $7-billion of plant and equipment.

PICHI CHUANG/PICHI CHUANG/REUTERS

Apple Inc shares dipped nearly three prr cent in early trading after an analyst said the iPhone maker is cutting orders from suppliers of parts for its iPad tablet.

JPMorgan Chase said in the research note that several suppliers indicated in the past two weeks that Apple lowered fourth-quarter iPad orders by 25 percent.

"Our understanding is that this is not in preparation for a new model launch," said Gokul Hariharan, JP Morgan's Asia Pacific electronic manufacturing services analyst.

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The move could result in slower sales for suppliers like Hon Hai Precision Industry Co, the analyst added.

Hariharan noted that Mark Moskowitz, JP Morgan's U.S.-based Apple analyst, does not expect the supply chain adjustments to result in downside to his estimates for iPad shipments.

Another analyst report out of Asia over the weekend indicated that the retail outlook was that Apple remained positive on the continent with packed Apple stores in several Chinese cities..

"We anticipate continued strong earnings growth for Apple due to our checks indicating strong global demand for the iPhone and iPad," said analysts at Canaccord Genuity.

Apple did not immediately reply to a request for comment.

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