Further evidence that Apple has reduced orders for iPad 2 components has come from sources in the manufacturing industry.

As Macworld reported earlier this week, Apple is said to have reduced orders for the iPad 2 in the face of declining demand for the device. It is also thought that price cuts for the device could be on the way.

A new report in Digitimes claims that there is particular concern among touch panel suppliers with Apple reducing its iPad 2 orders for the fourth quarter of 2011. Touch panels are expensive to produce and these high operating costs keep margins thin for the suppliers.

The report adds that Apple's negotiations with the touch panel vendors involved giving higher estimates of volumes in order to obtain lower quotes in terms of cost per unit, but as Apple has lowered the order touch panel manufacturers are facing a struggle to remain profitable.