Apple (AAPL) Halves iPhone 5 Part Orders Due to Week Demand: Report

By Jan 14, 2013, 7:48 AM Author's Blog  

The Wall Street Journal is reporting that Apple (AAPL) has cut in half its orders for the iPhone 5′s 4-inch screen in the current quarter due to “weaker-than-expected-demand”. The iPhone maker also reportedly trimmed component orders for other screen sizes as well, a move which seems to suggest that sales of the iPhone line, in the face of strong competition from Samsung and Google (GOOG), haven’t been as strong as previously anticipated.

“Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order,” two people familiar with the situation told the Journal.

“The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people.

Apple notified the suppliers of the order cut last month, the people said.”

The WSJ report is joined by a similar article from the Nikkei, Japan’s largest business newspaper, which claims that Apple’s original order of 65 million units in the quarter is being significantly reduced. Sources say Japan Display’s plant, where Apple has invested heavily, is expected to temporarily reduce output by 70% to 80% compared to the October – December period. Sharp’s dedicated facility for iPhone 5 LCD panels production is also expected to be down by around 40% from its October to December level.

It’s worth noting that it’s not that unusual for iPhone demand to start waning at the 6 month mark, especially after Xmas. That said, it remains to be seen whether Cupertino’s reduction is related to the ongoing rumors of a cheaper model introduction to the iPhone line sometime in fiscal 2013.

Apple is set to report Q1FY13 earnings on January 23, so we’ll hopefully get a better idea on the state of the iPhone then.

Apple’s stock fell $19.95, or 3.83 percent to $500.35 in premarket trading / 7:11AM EST – Nasdaq Real Time Price

Ticker’s 52wk range: $419.55 – $705.07.

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2 Comments

  1. ed says:

    Very old news. We knew this a month ago. It’s typical for these types of rehash “bad” news articles to come out before earnings (and OPEX this week). Be careful traders…bear traps being set.

  2. Jon says:

    As with all stories this drastic about AAPL early in the new year in the last few years, this one will be proven false. But only the average shareholder has got closed out and the hedge funds have taken the cream. No doubt they’ll come up with a bullshit reason for the inaccuracy.

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