iPad Mini Manufacturer Sees Weaker Demand for the Tablet This Quarter [Updated]

Pegatron, a contract manufacturer for Apple that makes the iPad mini and the iPhone 4S, among other products, said today that its second quarter consumer electronics revenue will drop 25 to 30 percent from the previous quarter, reports Bloomberg.

The company says there is a decline in revenue from iPad mini production is "more on demand, while price has been stable", but CEO Jason Cheng also noted that "almost every item is moving in a negative direction" for the quarter. "Not just tablets, also e-books and games consoles".

The iPad Mini accounts for more than half of Pegatron’s consumer-electronics revenue, and the iPhone 4S contributes a majority of sales in the communications division, Cheng said.

"This is a bigger drop than we’d expected," said Vincent Chen, who rates the company buy at Yuanta Financial Holding Co. in Taipei. "We’re seeing strong indications from the supply chain that demand for iPad Mini will now fall 20 percent to 30 percent from the first quarter, instead of an earlier 15 percent estimate."

In its quarterly results report in April, Apple issued guidance for expected revenue for the June quarter of $33.5-35.5 billion, a drop in revenue of some 20 percent from the prior quarter.

Reports have indicated that mass production of the display for a Retina iPad mini should begin in June or July, for a planned release well into the third calendar quarter of 2013.

Update: Fortune reports that Pegatron CEO Jason Cheng has clarified the situation, noting that in no way did he indicate weakening iPad mini demand was responsible for the company's projected revenue decrease. The association with iPad mini demand appears to have simply been speculation by Bloomberg based on the device being responsible for a significant portion of Pegatron's consumer electronics division revenue. In an email to Fortune, Cheng wrote:

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.