The analysts say "several" of Apple's supply-chain partners have reported this cut, which has come in the last two weeks. It is the first such cut that JP Morgan analysts have ever seen.
Interestingly, the JP Morgan report also says that the firm's US-based Apple analyst, Mark Moskowitz, does not plan to cut his forecast of 10.9 million to 12 million iPad shipments in Q3 and Q4.
JP Morgan did not say which companies had reported the cut.
It's hard to know how concerned to get about a report like this. Even if it's dead-on accurate, we don't know what Apple's internal orders were versus the market's expectations. We also don't know the reason for the cut, though the most obvious one is disappointing demand.
A 25% cut is a big cut. And it's hard to see how it could possibly be good news. But in the hours since the story appeared, several bullish (or at least less bearish) interpretations have been floated.
For example, some are speculating that the cut is the result of a product transition, from the iPad 2 to the iPad 3. Anything's possible, but this seems unlikely. Apple would not likely be surprised by the timing of the iPad 3 launch--and it would have to have been surprised to cut orders it had already placed.
Another theory is that, since Apple is opening a new Foxconn factory in Brazil, Apple is just moving some production to Brazil. This is an interesting theory, but the same supplier, Foxconn, is operating the factory in Brazil, so it seems unlikely that the JP Morgan analysts would fail to note this.
One of the most persuasive positive theories is that Apple placed orders it knew were too large just to lock up supply of critical parts and box its competitors out. And now that it's too late for the competitors to ramp up, Apple is releasing the supply, knowing that, even if its suppliers are furious, they won't dare cut the company off.
Right now, the market is focused on Apple's iPhone 5 launch, which will probably happen in October. If no more information is forthcoming about the iPad, this launch will likely eclipse iPad concerns. But it's certainly something investors should be aware of.