Is tablet demand slowing down?


Corning (s GLW), the maker of the hard-to-shatter Gorilla glass put on the map by the original iPhone, saw a notable reduction in demand for its glass for tablets during the most recent quarter, according to financial analysts, sparking concerns that the market for tablets may be slowing down.

Corning announced Tuesday that it will cut its global glassmaking supply by 25 percent “amid a glut of supply” by the end of the fourth quarter of 2011, The Wall Street Journal reports. As a result, the company’s shares dropped almost 12 percent to $13.01.

The analysts at UBS say another reason is demand for a particular type of its glass, the Gorilla Glass used on tablets. In a note to Corning investors Tuesday, they said, “Corning sees lower tablet demand affecting demand for gorilla glass. This was also the case in 3Q and seems to reflect a weaker tablet market.”

Tablet makers that use Gorilla Glass, according to Corning, include Acer, Asus, Dell, Lenovo, Motorola and Samsung. That’s not a complete list because not every customer allows Corning to advertise. We know the iPhone uses Gorilla Glass, so it’s not a huge leap to guess Apple uses it too.

But this isn’t the only sign. There have been a few hints that demand for various tablet supplies and components are being ordered in smaller amounts. Last week a Digitimes report claimed major PC makers who are also in the tablet business, were planning to exit tablets sometime next year.

And there there was a major-league flip-out in September when a JP Morgan investor note said that Apple had lowered its order for some components for the iPad 2. A couple analysts immediately weighed in, including another JP Morgan analyst, to say Apple was probably doing a readjustment after its intial production ramp up, which made sense.

Tuesday’s Corning news could or could not be related, but considering the pattern of these recent reports, it just makes us wonder. Definitely something to keep an eye on going into 2012.


Jeremy Toeman

I think this goes back to the “there’s an ipad market, but no tablet market” storyline. all the other manufacturers just pointed at apple and said “we can play too” but they are missing their numbers by orders of magnitude…

Comments are closed.