Apple reportedly cuts orders for iPhone 5 components due to decreasing demand

14 Jan 2013

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The iPhone 5

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Demand for Apple’s current flagship smartphone, the iPhone 5, appears to have lagged if recent reports are to be believed. Apparently, orders from suppliers have been cut back for this quarter, indicating less demand for the device than was expected.

According to “people familiar with the situation”, reports The Wall Street Journal, orders for screens for January to March this year have dropped by half, while orders for other components have also been scaled back.

While Apple remains the world’s most profitable smartphone manufacturer, it has been kept off the top spot for market share by Samsung, named the world’s top mobile brand in 2012 by IHS iSuppli.

IDC figures put Samsung’s smartphone market share at 31.3pc in Q3 2012, while Apple held 14.6pc. Both companies are due to announce their full-year earnings for 2012 later this month, and the Journal reports that Samsung’s operating profit could be as high as US$8.5bn.

In November last year, there were fears that suppliers could not meet demand for the iPhone 5 and when the smartphone launched in China just before Christmas it saw a record 2m units sold in just three days. However, if these latest reports are true, the iPhone 5 could be set for a slow first quarter in 2013.

Earlier this month it was speculated that Apple could be working on a smaller iPhone to reach out to lower-cost markets, thus increasing its reach; however, the tech giant poured cold water on these rumours, saying its focus will continue to be on quality and profit.

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Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com