Blame it on Apple’s poor little iPad mini

Is global demand really weakening for Apple’s once-hot iPad mini? Or was a Bloomberg report to that effect a bit off the mark?

Veteran Apple watcher Philip Elmer-DeWitt has taken reporter Tim Culpan to task for his story this week suggesting softer sales at Apple supplier Pegatron were due to limp demand for the precious little tablets Apple launched last year to great fanfare.

In a post at Apple 2.0, Elmer-DeWitt deconstructed Culpan’s piece, raising questions about the author’s attribution to Pegatron’s CEO Jason Cheng that slowing sales were due to the iPad mini. As Elmer-DeWitt wrote:


The theme of Thursday’s second-day headlines in the U.S. was that Pegatron is on a hiring spree, boosting its workforce 40% and anticipating that communications products would drive revenue increases in the second half of 2013 — all of which somehow fueled speculation that the company might be building a lower-cost iPhone for Apple (AAPL).

But Bloomberg’s Tim Culpan came away from Wednesday’s conference with a different story, one with an anti-Apple slant that got widely picked up. (Seeherehere and here.)

He pointed out the headline to Culpan’s piece:

Falling IPad Mini Demand to Push Pegatron Electronics Sales Down

Then he pointed out the lead of the story:

Pegatron Corp., the Taipei-based maker of Apple Inc. devices, forecast its biggest drop in consumer-electronics revenue in six quarters as iPad Mini demand falls.

And last but not least, he shared what he called Culpan’s “killer quote:”

A decline in revenue from the iPad Mini ‘is more on demand, while price has been stable,’ Pegatron Chief Executive Officer Jason Cheng said.

And then Elmer-DeWitt, who wondered about the placement of the quotation marks in that quote,  dove in with both feet:

Now it could well be that after rising 65% year over year last quarter, demand for one or more iPad products might be slowing.

But two things about that quote immediately raised suspicions.

First, the phrase about a decline in iPad mini revenue is not in quotation marks, suggesting that it came from the reporter, not the source.

Second, have you ever known an Apple supplier to say anything on the record about demand for any of Apple’s products? Not if he or she wants to keep doing business with Tim Cook.

So, like any good journalist, Elmer-DeWitt went straight to the horse’s mouth:

To get to the bottom of the story, I asked PegatronCEOJason Cheng by e-mail about that quote. Here’s what he said:

“We held our Institutional Investors Conference yesterday, and gave out a guidance of our 2Q13 business outlook… The category of Consumer Electronic Product includes game consoles, LCD-TV, e-paper readers, tablet products, and some others. We put all tablet products in this category, but have never broken down to detail numbers for specific products nor customers.

“After the meeting, one reporter from Bloomberg approached me, trying to dig out detail numbers about some specific product. I clearly refused to comment on specific products, nor customers, even though he continued with other questions. I did say those words that he quotes me in the article “more on demand, while price has been stable”…, “almost every item is moving in a negative direction”…; “Not just tablets, also e-books and games consoles”. But I did not say anything associated with any specific products.

“‘No indication, nor hint for specific products or customers’ has been our principle and guideline for any public events such as investors conference. There are always speculations after these meetings.

“Thank you for the mail to clarify.”

At last check, Elmer-DeWitt was still waiting to hear back from Culpan about his story.



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  • Dermbuilder

    Could it be that demand is finally becoming saturated, that is, most of those who want a tablet already have one?