Why Is Apple Cutting iPad Shipments?

According to several DigiTimes sources with supply chain information, Apple (NASDAQ:AAPL) may be cutting back its shipments of the iPad Mini, which could be a good signal or a bad omen.

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The sources suggested that Apple may drop its shipments of the iPad Mini in April by as much as 20 percent, and the cut could continue throughout the rest of the second quarter. That would bring the total of iPad Mini shipments down to nearly 10 million units for the period ending in June.

This supposed decrease in shipments comes after the market research firm NPD suggested that Apple could ship a total of 55 million iPad Minis and 33 million iPad this year — which was a reduction from previous predictions for shipments of 40 million iPad Minis and 60 million iPads.

Speculations as to the reason behind the lowered shipments has lead to two significant hypotheses. The first being that Apple may be preparing to launch a second-generation iPad Mini in the third quarter. The second being that Apple is facing stiffer competition from other 7-inch tablets running on Google’s (NASDAQ:GOOG) Android…

Many have been speculating and anticipating the launch of an updated iPad Mini, which many expected will include one of Apple’s high-resolution Retina displays. If the product does launch in the third quarter, it could potentially boost Apple’s sales, and would help the company stay close the previous shipment estimates.

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However, if it’s actually the case that Apple is facing increased pressure from competing tablets, like Google’s Nexus 7, Apple could fall short of previous shipment estimates. So, early in the third quarter, it will be important to see if Apple announces a new iPad Mini model, as this would show which of the two hypotheses is true and how iPad sales will fair for 2013.

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