1 of 4. A visitor tries Apple Inc's iPad at an electronics store in central Seoul January 18, 2013. Sharp Corp has nearly halted production of 9.7-inch screens for Apple Inc's iPad, two sources said, as demand shifts to its smaller iPad mini.

TOKYO/SEOUL | Fri Jan 18, 2013 3:48pm EST

TOKYO/SEOUL (Reuters) - Sharp Corp has nearly halted production of 9.7-inch screens for Apple Inc's iPad, two sources said, possibly as demand shifts to its smaller iPad mini.

Sharp's iPad screen production line at its Kameyama plant in central Japan has fallen to the minimal level to keep the line running this month after a gradual slowdown began at the end of 2012 as Apple manages its inventory, the industry sources with knowledge of Sharp's production plans told Reuters.

Sharp has stopped shipping iPad panels, the people with knowledge of the near total production shutdown said. The exact level of remaining screen output at Sharp was not immediately clear but it was extremely limited, they said.

Company spokeswoman Miyuki Nakayama said: "We don't disclose production levels."

Apple officials, contacted late in the evening after normal business hours in California, did not have an immediate comment.

The sources didn't say exactly why production had nearly halted. Among the possibilities are a seasonal drop in demand, a switch to another supplier, a shift in the balance of sales to the mini iPad, or an update in the design of the product.

Macquarie Research has estimated that iPad shipments will tumble nearly 40 percent in the current quarter to about 8 million from about 13 million in the fourth quarter, although Apple's total tablet shipments will show a much smaller decrease due to strong iPad mini sales.

APPLE SHARES

Any indication that iPad sales are struggling could add to concern that the appeal of Apple products is waning after earlier media reports said it is slashing orders for iPhone 5 screens and other components from its Asian suppliers.

Those reports helped knock Apple's shares temporarily below $500 this week, the first time its stock had been below the threshold mark in almost one year.

Apple, the reports said, has asked state-managed Japan Display, Sharp and LG Display to halve supplies of iPhone panels from an initial plan for about 65 million screens in January-March. Apple is losing ground to Samsung, as well as emerging rivals including China's Huawei Technologies Co Ltd and ZTE Corp.

NO BIG CHANGE AT OTHER MAKERS

In addition to Sharp, Apple also buys iPad screens from LG Display Co Ltd, its biggest supplier, and Samsung Display, a flat-panel unit of Samsung Electronics.

Both LG Display and Samsung Display declined to comment.

A source at Samsung Display, however, said there had not been any significant change in its panel business with Apple, which has been steadily reducing panel purchases from the South Korean firm.

A person who is familiar with the situation at LG Display said iPad screen production in the current quarter had fallen from the previous quarter ending in December, mainly due to weak seasonal demand that is typical after the busy year-end holiday sales period.

Sterne Agee analyst Shaw Wu said some of the product cutbacks at Sharp are probably seasonal.

"The March quarter is almost always weaker than the December quarter," he said, adding that Apple also consolidates suppliers of certain components during quarters with weaker demand. "The Korean manufacturers are more efficient and typically have lower costs."

Apple's iPad sales may have also suffered amid a weak Christmas shopping period that hurt other consumer gadget makers as well.

CROWD OF RIVAL PRODUCTS

Apple also faces stiffening competition in tablets from a growing crowd of rival products from makers including Samsung with its Galaxy and Microsoft Corp's Surface. A consumer shift to smaller 7-inch screen devices, which Apple responded to late last year by launching its iPad mini for $329, are adding pressure.

BNP Paribas expects the iPad mini will eat into sales of the full-sized iPad, with the mini rise to 60 percent of total iPad shipments in the January-March quarter.

Looking to cut into Apple's market share in the smaller segment are Amazon.com Inc with its Kindle and Google Inc with its Nexus 7.

CEO Tim Cook, who is credited with building Apple's Asian supply chain, has overseen several gadget launches, including the iPhone 5, the latest iPad models and the iPad mini during his first year, is under pressure to deliver the kind of product innovations that wowed consumers during Steve Jobs' tenure to keep his company's profit growth stellar.

Sharp, which also supplies screens for the iPhone, has been working with its main banks on a restructuring plan after posting a $5.6 billion loss for the past fiscal year. To secure emergency financing from lenders including Mizuho Financial Group and Mitsubishi Financial Group it had mortgaged its domestic factories and offices including the one building screens for Apple.

In December, Qualcomm Inc agreed to invest as much as $120 million in Sharp and the two companies said they would work to develop new power-saving screens.

(Additional reporting by Poornima Gupta in San Francisco; Writing by Tim Kelly; Editing by Ken Wills and Richard Chang)

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n">(Reuters) - Winnebago Industries Inc (WGO.N), the largest U.S. motor home maker, said it plans to increase its production in the current quarter to meet the high demand that also helped it report stronger-than-expected first-quarter results.

Shares of the company were up 13 percent at $15.95 at noon on the New York Stock Exchange on Thursday. The stock rose to a year-high of $16.22 earlier.

The company said its motorhome order backlog had more than tripled from a year earlier to 2,118 units as of December 1.

"We have continued to increase our production schedule and have hired additional employees to meet this improved demand during the last two fiscal quarters," Chief Executive Randy Potts said in a statement on Thursday.

Order backlog, which the company defines as orders to be shipped within the next six months, grew for both low- and high-end products, Potts said on a conference call.

Growth in motorhome revenue was on strong demand for the company's new entry-level Class A gasoline offerings, Chief Financial Officer Sarah Nielsen said during the call.

The company's Class A models are conventional motor homes constructed directly on medium- and heavy-duty truck chassis.

Winnebago introduced low-priced models after the recession reduced demand for higher-end motorhomes costing up to $350,000.

Net income rose to $7.4 million, or 26 cents per share, from $1 million, or 4 cents per share, a year earlier. Revenue rose 47 percent to $193.6 million. (link.reuters.com/xav74t0)

Analysts on average had expected earnings of 10 cents per share on revenue of $155.3 million, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Ted Kerr)

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1 of 2. An employee pushes a car engine at a Geely Automobile assembly line in Cixi, Zhejiang province June 21, 2012.

BEIJING | Thu Aug 9, 2012 5:28am EDT

BEIJING (Reuters) - China's factory output growth slowed unexpectedly in July to its weakest in more than three years, underlining stiff global headwinds that may prompt policymakers to take more action to keep growth on track to meet a 7.5 percent annual target.

Retail sales and fixed asset investment also missed market forecasts in official data released in Thursday, increasing expectations that Beijing will act to support an economy that has seen growth sliding for six straight quarters.

Annual consumer inflation, meanwhile, fell to a 30-month low last month, suggesting that the central bank has ample scope to ease policy further after cutting interest rates in June and July.

"We think the weakness will be more stubborn than people had expected," said Li Wei, China economist at Standard Chartered Bank in Shanghai. "My view is that political rhetoric is losing its effectiveness in boosting confidence and you need actual actions to boost growth."

Expectations of more stimulus measures in response to the data boosted riskier assets, with Asian shares rising to a three-month high and the commodity-sensitive Australian dollar testing a 4-1/2-month peak.

Apart from lowering interest rates, Beijing has also cut the amount of cash that banks must hold as reserves (RRR) to free up an estimated 1.2 trillion yuan ($191 billion) for lending in a series of moves since November 2011.

President Hu Jintao and Premier Wen Jiabao have promised to step up policy "fine tuning" in the second half of the year to support the economy.

The central bank is widely expected to continue its gradual policy easing in the coming months to support growth, despite its recent warning that inflation may pick up after August.

The benchmark Reuters poll last month showed analysts expected the central bank to deliver its next interest rate cut in the third quarter and two more cuts in banks' reserve requirement ratio by the end of the year.

"Policy measures the government has taken so far are not enough to stabilize growth and policy support should be stepped up," said Wang Jun, economist at China Centre for International Economic Exchanges (CCIEE), a government think-tank in Beijing.

"On monetary policy, the central bank should cut banks' reserve requirement ratio (RRR) as quickly as possible."

GLOBAL GROWTH FALTERING

China's economy is struggling to escape from the effects of the euro zone debt crisis and a sluggish U.S. recovery that are keeping global growth at a low ebb, the main factor that pushed China's new export orders in July into their steepest fall in eight months.

Weak property investment is hurting economic growth despite a modest pick-up in sales and prices, while falling factory-gate prices cut into corporate earnings and limit capital spending.

The central government has been fast-tracking some infrastructure projects, but its efforts have sparked fears of overcapacity.

Growth-obsessed local authorities have been rolling out some investment projects in recent weeks, but their ability to fund them remains in doubt given more than 10 trillion yuan in local debt - a legacy of the massive stimulus unleashed in 2008/09.

Policy stimulus could give only a limited boost to the economy in the absence of a global recovery, analysts say.

"Economic growth in the third quarter is likely to remain sluggish. Growth may show some improvement from September," said Zhang Hanya, a researcher with the National Development and Reform Commission, the country's top planning agency.

FORECASTS MISSED

China's industrial output growth slowed to 9.2 percent year-on-year in July, its weakest since May 2009, down from 9.5 percent in June and below the 9.8 percent forecast in a Reuters poll.

Annual growth in fixed-asset investment, in the likes of real estate, roads and bridges, came in at 20.4 percent in January-to-July, unchanged from the January-to-June period and just below the 20.5 percent forecast.

Growth of retail sales, the biggest driver of the economy's expansion in the first quarter, eased to 13.1 percent, short of the forecast of 13.7 percent.

Economic growth has been sliding since the beginning of 2011, reaching 7.6 percent in the second quarter, the weakest pace since the global financial crisis.

Analysts polled before the data had expected to see a pick-up in growth in the third quarter to 7.9 percent and full-year growth of 8 percent, above the official target.

Barclays Capital cut its 2012 China GDP growth forecast to 7.9 percent from 8.1 percent after Thursday's data.

Annual consumer inflation eased to 1.8 percent in July from 2.2 percent in June, pulling back further from a three-year high last July of 6.5 percent. Economists polled by Reuters had forecast inflation to ease to 1.7 percent in July.

"This number gives more room for policy easing," said Zhang Zhiwei, chief China economist at Nomura in Hong Kong.

"It is now pretty clear that CPI will likely be below the official 4 percent target for the year, so the policy focus for the government can stay clearly on growth."

Consumer prices edged up 0.1 percent in July from the previous month, compared to expectations of a 0.1 percent drop.

July's data showed that producer prices fell in July by 2.9 percent from a year earlier, a sharper decline than the 2.5 percent forecast and the steepest fall since October 2009. It marked a fifth straight month of falling producer prices.

(Additional reporting China economics team; Editing by Alex Richardson)

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