May 9 2013, 3:27am CDT | by Sumayah Aamir
Pegatron has seen better days than this. With the second quarter incoming profits dropping to 30%, the Asustek Computer spin-off company is in a state of decline like never before. Pegatron also makes Microsoft’s Surface Tablets. Apple itself has been under flak from its main rival in the market which is none other than Samsung. The chief bone of contention has been the iPad Mini. Just about every item from the e-book to the gaming console has been seeing a fall in sales.
The spokesperson declined to comment on the “situation normal absolutely fouled up” (SNAFU) in the internal working order of Pegatron. The fact of the matter is that the iPad Mini accounts for more than half the sales. The downward trend is an unexpected reversal that has the company in a tizzy. With demands falling through the roof, the extra supplies will be left in a lurch.
These deadpan profitability margins have the Apple provider literally running to the bank. The downward spiral, along with the concomitant losses, has come as somewhat of a rude awakening for Pegatron. Other giants in the field such as the Korean behemoth, LG have also faced a hollowing of demand rates. This has seriously upset the apple cart (no pun intended) in more than one way.
Reasons for this depressing trend include the supply chain side of the economic game which is a very complex concept to understand. While the prices have remained static, it is the demand ratio that has gone out of whack. Wherever the chips may fall, the negative direction has everyone worried. Pegatron blames the iPad Mini U-Turn for its bad luck, according to Bloomberg . This phenomenon isn’t new. It is a part of the cut-throat, dog-eat-dog, razor-sharp business world of glass, steel and concrete. The savage and unemotional rationality shown in the stake for profits obviously has its winners and its losers. And sometimes you win some and at other times you lose some.
Most importantly, risk-taking is a fundamental feature of commercial interactions. And where high risk is involved the steep crashes will come quickly too. The boom and bust business cycles of capitalism are proof if any is needed of this bipolar trend. Pegatron will hopefully recover since there is such a thing as resilience but for now it is down in the dumps.
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