Apple's orders to its Taiwanese manufacturing facilities call for the production of roughly 5 million iPads before the heart of summer rolls around, according to a new report which also praises the company for its iPhone, notebook and desktop secular growth trends.
"We believe various news articles and competitor notes calling for a build delay were just false alarms and note Apple has already announced that Wi-Fi iPad models will be available in the U.S. on April 3 and models with Wi-Fi and 3G will be available in late April," he wrote. "While we do not yet have visibility into the specific chip suppliers, we think that many of the iPhone chip suppliers will also sell into the [iPad]."
Meanwhile, Berger said similar channel checks show Apple has recently increased orders for the production of iPods and Macs for the current calendar quarter while decreasing build orders for iPhones. More specifically, he said iPod orders have been hiked by 133%, notebook orders by 70%, desktop orders by 100%, while iPhone orders were cut by 20% "as Apple seeks to reduce channel inventory."
The analyst pointed out, however, that changes to build volumes and their sequential growth rates (as seen in the chart above) "are not highly correlated with Apple sales data in any one period due to inventory build ups and draw downs, the impacts of new product launches, and seasonal impacts." Instead, he follows the trends to determine whether the company is in need of more product (which would benefit its component suppliers), or less product (which would obviously have a negative impact on component suppliers).
Perhaps more telling are Berger's charts on Apple's four-quarter summation of production builds, which provides an alternative view on the growth of Apple's core hardware offerings by presenting a running sum of build orders for each product over the preceding twelve months, with the totals having been normalized for seasonality and inventory buildups and draw-downs.
"What we see is that iPhone growth has been nothing short of spectacular, iPods seem to be a more mature product past its peak as iPhone and iPad sales cannibalize iPod sales, Notebook growth continues to be quite robust, and Desktop growth continues, but at a much more modest pace," he explained.
Overall, Berger concluded that his latest round of checks are likely to prove positive for Apple's Mac chip suppliers (like Intel, Marvell, and Nvidia), while being slightly negative for its iPhone chip suppliers (like Broadcom). The analyst carries no rating on Apple but ranks Broadcom at Outperform and both Intel and Nvidia at Market Perform.