Apple has reduced its orders for iPhone 5 components due to weaker than expected demand for the flagship smartphone, it has been claimed.
The Wall Street Journal said that Apple notified its suppliers of the reduced orders last month and says it comes at a time when arch-rival Samsung has overtaken the U.S. company as the world’s largest smartphone vendor by market share.
It quoted unnamed sources as saying: “Apple’s orders for iPhone 5 screens for the first quarter, for example, have dropped to roughly half of what the company had planned to order…
“The Cupertino, Calif., company also cut orders for components other than screens.
“While the popularity of iPhones and iPads has been boosting Apple’s earnings and investors’ expectations over the past few years, there have been concerns in recent quarters about how long the growth can continue.
“Apple’s stock, which peaked at about $705.07 in September, was down 3.2% at $503.70 in midday trading Monday in New York.”
This news may not be as bad as it initially sounds however. Apple is likely to have boosted its orders for components ahead of the Christmas season to ensure that it could meet the additional demand at the end of last year.
Brian Blair, an analyst with Wedge Partners, says order cuts are typical after the holidays.
He estimates that Apple sold 50 million iPhones during the quarter, ahead of average analyst estimates of around 47 million.
All said, there should not be too much cause for concern at this news.
Via: Wall Street Journal
