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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Worker Derrick Williams loads material into a cutting machine at a Wrap-Tite manufacturing facility in Solon, Ohio July 13, 2012.

WASHINGTON | Thu Sep 27, 2012 2:29pm EDT

WASHINGTON (Reuters) - Orders for long-lasting U.S. manufactured goods fell sharply in August, suggesting the main engine of the economic recovery was stalling even as a report showing a drop in new claims for jobless aid offered a hopeful sign on the labor market.

While weak demand for aircraft and automobiles accounted for much of the drop in orders last month, the Commerce Department report on Thursday underscored the damage being inflicted by the uncertainty over U.S. fiscal policy, Europe's debt troubles and a slowdown in China.

"Given the uncertainty associated with the fiscal cliff, there is certainly a wait-and-see attitude which is impacting a lot of the data," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

The so-called fiscal cliff refers to the $500 billion or so in expiring tax cuts and government spending reductions set to take hold in 2013 if the U.S. Congress fails to agree on an orderly way to reduce a huge budget deficit.

The Commerce Department said durable goods orders dived 13.2 percent, the largest drop since January 2009, when the economy was in the throes of a recession. The decline primarily reflected weak demand for aircraft and automobiles, and transportation orders fell 34.9 percent. Plane maker Boeing reported only one aircraft order last month versus 260 in July.

But orders were down for a wide range of goods, and even excluding transportation, orders fell 1.6 percent, dropping for a third consecutive month. The fall was in sync with other data indicating a marked cooling in the production side of the economy.

Economists polled by Reuters had expected orders for durable goods -- items from toasters to aircraft that are meant to last at least three years -- to fall 5 percent, with non-transportation orders rising marginally.

Unfilled orders dropped by the most since December 2009, pointing to weak factory activity in the months ahead.

"The thesis that manufacturing activity is likely to struggle for the remainder of the year continues to build," said John Ryding, chief economist at RDQ Economics in New York.

Underscoring the economy's weakness, the government revised its measure of second-quarter growth to just a 1.3 percent annual pace from 1.7 percent, largely to reflect the impact a drought in the Midwest had on farm inventories.

Inventories lopped off almost half a percentage point from GDP growth in the last quarter. However, economists expected this to reverse in the third quarter.

Durable goods inventories set a fresh record high in August, prompting economists at Macroeconomic Advisers to raise their third-quarter GDP growth estimate by one-tenth of a percentage point to 1.8 percent.

There was also bad news on the housing market, which has been one of the economy's relative bright spots. Contracts to buy previously owned homes fell in August, providing a counterpoint to other recent data that have shown activity in the housing market picking up, a separate report showed.

However, not all the news on Thursday was downbeat.

The Labor Department showed the number of Americans filing new claims for jobless benefits fell 26,000 last week to a two-month low of 359,000. The four-week moving average for new claims, a better measure of labor market trends fell for the first time after five weeks of increases.

Investors on Wall Street shrugged off the mixed economic data and bought stocks after five straight days of losses. U.S. Treasury debt prices fell on profit-taking after recent gains, while the dollar was little changed versus a currency basket.

ANXIETY OVER FISCAL POLICY

Despite the drop in claims last week, labor market weakness was expected to persist for a while because of anxiety over higher taxes and deep government spending cuts in January and slowing global growth, economists said.

Sluggish job gains and stubbornly high unemployment spurred the Federal Reserve this month into launching a third round of bond purchases to drive down already low interest rates.

The U.S. central bank vowed to buy $40 billion worth of mortgage-backed securities each month until it sees a sustained upturn in the labor market.

"Today's reports suggest that the Fed is going to remain very accommodative for quite some time to try and spur demand and job growth," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Mortgage finance company Freddie Mac said the mortgage-backed securities purchases helped push the average rate on a 30-year fixed rate mortgage down to a record low of 3.40 percent this week.

In a preliminary estimate of an upcoming annual revision to its main employment measures, the Labor Department said it likely undercounted job growth in the 12 months through March by 386,000.

The encouraging news on the labor market was eclipsed by the weak durable goods report.

Orders for non-defense capital goods excluding aircraft, a proxy for business spending plans, rose 1.1 percent in August, only partly reversing a 5.2 percent slide the prior month.

What's more, shipments of these goods, which are used to calculate equipment and software spending in the GDP report, fell for a second straight month. That implies little or no growth in equipment and software investment this quarter.

(Additional reporting by Rachelle Younglai; Editing by Andrea Ricci and Tim Ahmann)

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TOKYO | Thu Aug 2, 2012 2:09am EDT

TOKYO Aug 2 (Reuters) - Sharp Corp, which posted its worst net loss in a century in the last financial year, reported a first-quarter loss as waning TV demand and an overcapacity at its main liquid crystal display plant continued to weigh on earnings.

In the three months to June 30, Sharp swung to an operating loss of 94.1 billion yen ($1.20 billion) from a 3.5 billion-yen profit a year earlier. That was deeper than the average 44.4 billion-yen loss estimated by five analysts surveyed by Thomson Reuters I/B/E/S.

The manufacturer of Aquos TVs also slashed its forecast to a full-year operating loss of 100 billion yen, from its earlier estimate for an operating profit of 20 billion yen. That compares with the average estimate for an operating loss of 18.2 billion yen in a poll of 16 analysts surveyed by Thomson Reuters since the company released its full year results in May.

Sharp is considering its first major layoffs that a source familiar with the matter told Reuters could be as many as 5,000 people.

The company in March also agreed to sell a 46.48 stake in its Sakai LCD plant to Taiwan's Hon Hai Precision Industries , part of the Foxconn Group, in a bid to isolate itself from the losses at the facility in western Japan.

Hon Hai, a major supplier to Apple Inc, is purchasing new shares in Sharp worth 66.9 billion yen, giving it an 11 percent stake in Japan's last major fabricator of LCD panels for TVs.

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