Apple Cuts Orders for iPhone 5 Parts on Weak Demand: Reports


Apple (AAPL) has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand, the Nikkei reported on Monday, in a further sign the U.S. firm is losing ground to Asian smartphone rivals.

Apple has asked Japan Display, Sharp and South Korea's LG Display to roughly halve supplies of LCD panels from an initial plan for about 65 million screens in January-March, the Japanese daily said, citing people familiar with the situation, adding the U.S. firm also cut orders for other iPhone components.

The move, if confirmed, would tally with analysts saying that sales of the new iPhone 5, which was released in September, have not been as strong as anticipated.

Apple has lost ground in the $200 billion plus global smartphone market to South Korean rival Samsung Electronics and smaller Chinese rivals such as Huawei Technologies and ZTE.

Samsung said on Monday that global sales of its flagship Galaxy S smartphones had topped 100 million since the first model was launched in May 2010. The Galaxy S3, launched last May, sold more than 40 million in seven months. The new Galaxy S IV is widely expected to be released within months, and may have an unbreakable screen, full high-definition quality resolution boasting 440 pixels per inch, and a more powerful processor.

Samsung has overtaken Apple, helped in part by the popularity of its Galaxy Note II phone-cum-tablet, reinforcing the benefits of offering a wider range of handheld devices at most price points, while Apple rolled out just a single new smartphone last year globally, analysts have said.

Samsung is expected to increase its smartphone sales by more than a third this year, and widen its lead over Apple, according to researcher Strategy Analytics, which has forecast Samsung will sell 290 million smartphones in 2013 versus iPhone sales of 180 million. Kim Sung-in, an analyst at Kiwoom Securities in Seoul, sees Samsung shipping 320 million smartphones this year and doubling sales of its tablets to 32 million.

No one at Sharp was immediately available to comment on Monday - a national holiday in Japan - and parts suppliers to Apple in Taiwan declined to comment. An Apple spokesperson was not immediately available for comment outside regular U.S. business hours.

Japan Display's plant in Nomi, southwest Japan, where Apple has invested heavily, is expected to temporarily reduce output by up to 80 percent from October-December levels, the Nikkei reported, while Sharp's dedicated facility for iPhone 5 LCD panels will trim production in January-February by about 40 percent.

Apple cuts orders for iPhone 5 parts on weak demand: reports

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14 Comments

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Bobby

...many smart Apple phones are going into China's "basket", they don't buy Japanese.

January 15 2013 at 7:30 PM Report abuse rate up rate down Reply
weirdracin

darn bug, duplicated my posts, sorry

January 14 2013 at 10:25 PM Report abuse rate up rate down Reply
weirdracin

Well they screwed themselves with the cord change. Why should i upgrade and lose my stuff that only work with the old one.

January 14 2013 at 10:24 PM Report abuse rate up rate down Reply
Gloverboy6

Apple's reign is over. Everyone's figured out how they monopolize all of their software and hardware. I would NEVER buy an ipad or iphone for that reason.

January 14 2013 at 9:27 PM Report abuse rate up rate down Reply
laugh

COULD be that they haven't been able to get rid of the i-3 or i-4 they bought in the last two years.

January 14 2013 at 7:15 PM Report abuse rate up rate down Reply
sigmastef

I dont think this necessarily means they are losing ground. My wife and I both have Iphone 4's. For us it is the best gadget either one of us has ever had. Simply put, why should we upgrade when we are thoroughly satisfied with our current phones ? The difference between an old flip phone and a Iphone is as big as the galaxy but the difference between a Iphone 4 and a iphone 5 isn't that big at all for us. I bet there is a lot of people who are thinking like this. Apple needs to make their phones die when new models come out. In my opinion its the only way around this.

January 14 2013 at 4:08 PM Report abuse rate up rate down Reply
grstewartcpa

Better technology, Thinner phone with solar batteries.

January 14 2013 at 2:15 PM Report abuse rate up rate down Reply
Melissa

Iphone 5 is simply Overrated. I was always an android user and thought I would try the Iphone since there was so much hype on this phone. Very disappointed the iphone 5. I can say Samsung has a much better product and the android operating system cannot be touched...

January 14 2013 at 1:13 PM Report abuse rate up rate down Reply
suittl8

To hell with Apple !
in the late 1980's we saw the same thing as a lot of American Computers were Produced prepriority; this also delayed the creative development of the end user until other manufactures open the door and the industry took off.
Dont't get mad at the other smartphones they have led to greather features in the cell phone market ,not to mention greater value!

January 14 2013 at 12:17 PM Report abuse rate up rate down Reply
AL CONFER

What hs truly amazed me is why those that just have to have the next model of anything is amazing. It\'s like keeping up with the Jones\'s. Then these same people are foolish enough to tie themselves into two year contracts, which in my opinion is insane. Truly there is a sucker born every second.

January 14 2013 at 11:42 AM Report abuse rate up rate down Reply