Although Apple is reportedly set to use its iPad 2 to compete in the entry-level tablet PC market against Amazon's Kindle Fire when its next-generation iPads hit the market in March 2012, sources from Apple's supply chain have pointed out that Apple's orders for iPad 2 are dropping gradually, while orders for the new devices remain steady.
As for whether the drops in orders could mean that Apple is actually planning to phase out iPad 2, the sources noted it is still too early to tell, and more observations need to be done in 2012 before the picture becomes clearer.