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Maybe not.
According to Reuters on Friday, Japan’s Sharp Corporation is halting production of panels used in Apple’s (Nasdaq: AAPL) 9.7-inch iPad tablet as demand wanes. Reuters cites two sources on the information.
Instead, Sharp is looking to retool for the smaller iPad mini.
Production on Sharp’s Kameyama plant is said to be at a “minimal” level to keep the line running. Final output of the panels wasn’t made clear.
Recently, Macquarie Research said it expects iPad shipments to see a 40 percent decline in the quarter, though overall shipments should be supported by the iPad mini.
Apple released cellular versions of the iPad 4 and iPad mini in China today to what may said was “strong demand.” Apple’s China website lists a two-week wait on shipments for the iPad mini, though the iPad 4 shipment time was just one to three days.
What may concern investors is the lower price point and thus lower margins on the smaller tablet. Generally, a company will produce a low margin device and then beef up its size — but use similar components — and price to generate better net income. The first Ford (NYSE: F) off the line wasn’t a truck, remember, but those trucks are now the more-lucrative part of Ford’s operation as they use interchangeable parts and demand a higher price.
How much of this shift is already priced in is the big question. Apple is down 30 percent from all-time highs hit last September, but is the $500 level a stable point for shares right now heading into next week’s fiscal first-quarter report?
Apple is trading about one percent lower Friday.
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