Apple Slashes 9.7-Inch iPad Display Orders From LG By 50% Due To iPad Mini’s Surging Popularity
At the time when LG Display is said to be framing new strategies to reduce its reliance on Apple, new reports suggest that the Cupertino tech giant has slashed the its 9.7-inch iPad panel orders from LG by 50 percent or more.
The hit-or-miss Taiwanese publication Digitimes reported that the massive order reduction is the result of a fast-growing demand shifts to the iPad mini.
"Apple has reportedly decided to cut shipments for its 9.7-inch iPad products in the first quarter to as low as six million units, down from Apple's originally estimated 12-15 million units, due to increasing popularity among consumers for the iPad mini," the report said citing unnamed sources.
The Apple move has resulted in a reduction of LG's capacity utilization rate at its P9 factory to about 60 percent. According to the sources, the capacity utilization rate may even drop to 50 percent throughout the first quarter. As a result, the average capacity utilization rate of LG Display is expected to remain at about 80 percent throughout the first quarter of the year.
However, LG is reportedly accelerating the production of 32-inch TV panels to increase the utilization rate at the P9 factory but it's going to be a bumpy ride for the company as it is likely to face tough panel supply competition from China-based panel makers.
LG Display is also facing increasing competition from Japanese companies Sharp and Japan Display and according to a recent Wall Street Journal report, the Japanese yen may work in favor of these companies if Apple would consider a different choice for display sourcing.
Earlier it was reported that Apple has reduced the supply order for iPhone 5's components by almost 50 percent due to weaker-than-expected demand, which gave way for fresh rumors of the decreasing popularity of iDevices.