UBS: iPad Demand is Not Waning, Despite Gorilla Glass Concerns

UBS: iPad Demand is Not Waning, Despite Gorilla Glass Concerns

A warning from Corning about weakened demand for tablet glass had more to do with limited demand for non-Apple products than it did with Apple’s iPad, UBS analyst Maynard Um told clients Wednesday. Um also said he would not be adjusting his forecast of 12 million units shipped for Apple’s December quarter iPad shipments.

As The Mac Observer reports, Corning issued a warning on Tuesday that the company was cutting its estimates for it’s Gorilla Glass business. The company is now expecting a 25% decline quarter over quarter, instead of the 15% decline it had earlier predicted. Less than expected demand for tablet glass was blamed, leading many to speculate that the demand for the iPad was waning.

Apple uses Gorilla Glass on its iPhone and iPad devices, and as the story goes, it was Apple that got Corning to begin producing the material for the iPhone product line. The material was actually invented in the 1960s, but a lack of a profitable purpose for the product kept it from production until Apple needed it for their line of devices.

Maynard Um told clients in a research note that, “[Corning’s warning is] likely more related to weaker non-iPad demand,” and that anything related to Apple is to a “lesser degree.”

Apple had accounted for as much as 80% of Corning’s Gorilla Glass business in 2010, but it has since shrunk to about 50% as Corning acquired new customers.

Um also noted he was already taking a conservative stance on Apple’s December iPad shipments, and estimated 12 million iPads during the quarter in part because of Apple’s less-than-expected iPad shipments in the September quarter.

With a conservative forecast already in place, Mr. Um is not concerned that Corning’s warning had much to do with Apple and the company’s industry leading iPad.

UBS is maintaining its price target for AAPL of US$510 per share and its “Buy” rating on the stock.