Apple May Delay iPad 2 Launch Until June, Putting It on iPhone 5 Collision Course

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Apple is reportedly facing production problems in redesigning its next iPad version, potentially bumping shipments back two months to June, according to a Bloomberg report. That delay could cause problems because Apple (AAPL) historically trots out its new iPhone versions in June as well.

Yuanta Securities analysts, cited in the Bloomberg report, say they've heard "new issues" are flaring up with the iPad's new production specifications, resulting in a delay from an anticipated April launch date.

That potential delay could spell a lighter June quarter for Apple, because its fiscal third quarter wouldn't get the benefit of having roughly three months of iPad sales. And in the meantime, the quarter will be relatively quiet since redesigned iPhones historically haven't appeared in stores until late June.

More Pressure at the Manufacturer?


During Apple's fiscal first quarter that ended in December, the company generated net revenues of $26.7 billion, of which iPads accounted for 17% and iPhones 39%, according to its financial report filed with the Securities and Exchange Commission.

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The possible iPad delay comes as Apple is trying to incorporate some of the features found in its iPhone and Macbook Air, such as a thinner, sleek design coupled with faster chips, expanded memory and video-chat-friendly front- and rear-facing cameras. The Yuanta Securities analysts note that Apple issued iPad design changes before the Chinese Lunar New Year holidays, prompting the delay, according to Bloomberg.

Hon Hai Precision Industry, based in Taiwan, is manufacturing the iPad. Hon Hai, which is also known as Foxconn Technology Group, has had a rash of suicides at its manufacturing plants, as workers complain of an inhumane and militant management system at the world's largest technology manufacturing company, which also produces the iPhone.

The pressure to catch up with iPad production, along with churning out the next iPhone version, may prompt Apple to keep an even closer eye on the working conditions at its manufacturing partner. Last June, Apple CEO Steve Jobs told attendees at a technology conference that Apple found the rash of suicides at Foxconn troubling and the company was "on top of this."

Shares of Apple were down a 2.5%, or $9, to $341 in midday trading Tuesday.



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