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Reports: Apple has cut back iPhone 5 parts order

Apple has cut their order for screens by roughly half of what they initially expected, and have reduced other component orders as well.

Apple iphone 5 2012 09 14Enlarge
The new iPhone 5 is displayed during an Apple special event at the Yerba Buena Center for the Arts on Sept. 12, 2012 in San Francisco. (Justin Sullivan/Getty Images)

Apple has cut their orders for iPhone 5 parts significantly, which some have speculated is the cause of lower-than-expected demand. 

The company's orders for screens for the new model have dropped to around half of what they had initially planned to order for this coming quarter, according to two people familiar with the situation, the Wall Street Journal reported.

Japanese daily Nikkei has reported similar cutbacks, saying that Apple has asked suppliers Japan Display Inc, Sharp Corp, and South Korea's LG Display Co Ltd to cut back on some of the iPhone 5's components, according to Reuters

Business Insider, however, has raised eyebrows at the reports, and Apple has not yet commented on the reported cuts.

As Insider's Jay Yarow wrote: 

Apple is expected to sell ~48 million iPhones in the December quarter. If it meets that expectation it would be Apple's best ever iPhone quarter. Yet, somehow Apple was putting in an order for a giant sequential increase?

The new order number of 32.25 million sounds more reasonable. (We can't find a consensus number for the March quarter.) But we find it hard to believe Apple cut its orders in half.

Some analysts predicted a rocky few quarters for Apple back in December, including UBS analyst Steven Milunovich, CNET reportedMilunovich scaled back his initial iPhone sales estimates for the March, June, and September 2013 quarters by 5 million units each, and iPad estimates by around 2 million per quarter. 

Apple's hold on the smartphone market has also reportedly been dropping over the last year or so. InformationWeek reported that while it held control over 23 percent of the market in the fourth quarter of 2011, that number had dropped to 14.6 percent by 2012's third quarter. 

http://www.globalpost.com/dispatch/news/business/technology/130114/apple-cuts-iphone-5-parts-order