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Analysts React to iPad Mini News


Rumors say Brazilian Foxconn factories will also produce the new Apple tablet.

MINYANVILLE ORIGINAL It appears that the "iPad Mini" rumors are coming true. Two days ago, a major Apple investor told Fortune that multiple sources said that iPad Mini invitations will be sent out to the press on October 10. Today, the Wall Street Journal reported that Apple's Asian component suppliers have started mass production of "a new tablet smaller than the current iPad," according to people with knowledge of the situation.

Two of the individuals interviewed also said that the new tablet will have a 7.85-inch liquid-crystal display with lower resolution than the current iPad. This news confirms the screen size rumors generated by pictures of alleged dummy models of the iPad Mini released on the Internet. (Read this article for more predictions about the specifications of the new tablet: Apple's iPad Mini Debut Imminent: Sources.)

The Apple investor interviewed by Fortune believes an October 10 invite date to the press event means Apple will likely reveal the new tablet on Wednesday, October 17 with a launch date of November 2 based on past launches. However, this is still speculation.

An iPad Mini launch date would position Apple to compete with Amazon's (NASDAQ:AMZN) Kindle Fire HD and Google's (NASDAQ:GOOG) Nexus 7 this holiday season. Apple should be able to capture a larger share of global tablet sales, which market-research firm IHS iSuppli forecasts will surge 85% this year to 126.6 million tablets. The iPad accounted for roughly 60% of the global tablet market last year.

While the Wall Street Journal article did not identify the suppliers, Bloomberg reported in August that AU Optronics (TPE:2409) and LG Display (KRX:034220) will produce the screens for a smaller version of the iPad, according to four people familiar with the plans. The production of these screens will mark the first time AU Optronics has produced screens for Apple's handheld devices; it has produced only the panels for MacBooks in the past.

In the same report, TPK Holding (TPE:3673) and Yeh Cheng Technology, a subsidiary of the Foxconn Technology Group, were mentioned as the suppliers of the lamination coating for the mini tablet.

What Are Analysts Saying?

For sales projections, Kirk Yang, a Hong Kong-based analyst at Barclays, says Apple may sell up to 9 million units in 2012. Yang expects Taiwan-based Hon Hai (TPE:2317) to assemble 6 million to 7 million iPad Minis, or 60% of the total amount to be produced in 2012. Hon Hai exclusively assembled Apple's previous iPads, but Taiwan-based Pegatron (TPE:4938) will likely assemble and ship 3 million units in the fourth quarter of this year.

Yang originally expected Pegatron to assembly 70% of the tablets for this year, but it has run into production problems. Yang states, "Pegatron lacks the experience for tablet assembly, which has a long learning curve."
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