We’re still a couple of days from the release of Apple’s new iPad 2, but already analysts are speculating the refreshed tablet will be nothing but trouble for Cupertino’s rivals, who may go from playing catch-up to bursting the bubble on competition.
AppleInsider is reporting that Apple’s competitors in the tablet space may be setting their build plans too high for the year, creating an “increasing risk of a bubble burst” in the second half of this year. The gloom and doom from Wall Street comes courtesy of J.P. Morgan Research analyst Mark Moskowitz, who warned investors early Wednesday of the shifting tide.
"In our view, the technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan," Moskowitz wrote in his note to investors.
Moskowitz estimates that Apple’s competitors could build “approximately 65.1 million tablets in 2011,” a number that’s in sharp contrast with J.P. Morgan’s own estimates of only 47.9 million tablets being sold this year. Should the build numbers prove correct, manufacturers stand to sit on “as much as 51 percent oversupply in a worst case scenario.”
To no one’s surprise, Apple is expected to continue their dominance over the tablet market for 2011, with Moskowitz estimating that Cupertino could see “nearly 100 percent sales growth year over year, resulting in more than 29 million iPads sold worldwide” this year alone.
So who has the most to lose from the coming bubble burst? According to Moskowitz, it could be the component suppliers even more than the manufacturers themselves.
"Based on our research inputs, tablet makers eager to emulate Apple’s meteoric start are trying to secure components with inflated build plans," Moskowitz warned. "Of note, glass displays, processors, and, to a lesser extent, NAND Flash are the components that could be most at risk."
However, that doesn’t let the manufacturers off the hook, either. "Aside from Motorola’s Xoom and HP’s TouchPad (which does not have a price tag yet), the competitive offerings appear to be light on attraction, in our view," Moskowitz concludes.
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(Chart courtesy of AppleInsider)
