J.P. Morgan: iPad Gives Competitors ‘early dose of reality’

06 Jun 2011 | News | Ria Absin-Viente on Google+

J.P. Morgan has released a new investor report showing how the Apple’s iPad give its rivals their ‘early dose of reality’, making them reduce their build plans to compete with Apple’s god of tablet PCs.

According to reports, competitors like Motorola’s XOOM, Asustek’s Eee Pad Transformer, Samsung’s Galaxy Tab , and RIM’s PlayBook failed to deliver enough volume of sales against the Apple iTablet. Manufacturers of the said products are said to have reduced their used to be big build plans.

Data released by analyst Mark Moskowitz shows that sales of tablet PCs have slumped to 10 percent since the opening of March. The analyst assumed that Apple competitors have slowed down to adjust with the decrease in the demands of tablet PCs in the market.

Moskowitz has perceived the trend of tablet PC sales in the second quarter of 2011 warning Apple iDevice competitors in March that the demand for the iPad 2 can bring the “increasing risk of a bubble burst”. This can be brought by rival companies that will try to increase their build plans to compete with the original iTablet.

The coming of the iPad 2 even made it harder for competitors to catch up resulting to poor sales. The decision of competitors to reduce the production of tablet PCs is seen as the main factor that can bring the feared tablet PC bubble.

Moskowitz however, acknowledged that giving generalizations based on the current build plans can be inaccurate, considering that the company had to issue discounts to adjust to the limitations. J.P. Morgan had given an estimate of 63 million with regards to the building activity in the tablet PC market in 2011, after giving a discount of 14 percent. The firm had recently given an estimate of 65 million unit after giving a 20 percent discount however, the discount has been reduced due to the common reduction of build activities in the past months.

The analyst added that the activity of the tablet PCs in the market plays an important role in the overall tech food chain in 2011. Total shipments of tablets for the current year will reach 3 percent, with a total estimate of 11 percent combined for smartphone units and handsets.

Moskowitz expects more pressure in tablet build activity for the whole summer saying the increase can definitely be brought by the Cupertino Company. The company admitted to have produced and sold every iPad 2 unit for the first quarter of 2011 because of production issues. Shipments of the second-gen iTablet is expected to lower this year.

Statement from J.P. Morgan released an estimated shipment of 6.75 million iPads in the quarter of June.