Apple iPhone 5 component orders cut due to slowing demand

Posted on 15 Jan 2013 at 10:04, by Gareth Halfacree

Demand for Apple's iPhone 5 appears to have cooled, with the company reportedly dramatically reducing orders for critical components used to produce its flagship smartphone.

There's little denying that Apple's iOS 6-based iPhone 5, which boasts a thinner design and larger, high-resolution display than previous models, is a stunning smartphone - but the gadget has been under increasing pressure from devices running Google's Android operating system. In particular, the LG-manufactured Nexus 4 handset, with its extremely low price and high specifications, has been proving popular enough to harm iPhone sales - despite issues keeping the device in stock.

Apple, meanwhile, appears to have the opposite problem. According to a report in the Wall Street Journal, Apple has slashed orders for iPhone 5 components to a level half that previously expected, indicating that demand for the iPhone 5 has been significantly weaker than the company expected.

Citing anonymous sources familiar with the situation, the WSJ claimed that Apple's orders for iPhone 5 display screens has been cut to half its previously planned level - suggesting that sales of the device have not been living up to Apple's expectations. The news follows a slide in Apple's smartphone market share, which has dipped from 23 per cent at the start of last year to 14.6 per cent in the third quarter. The company's biggest competition, it seems, is Samsung and its popular Galaxy line - including the Galaxy S3 and upcoming Galaxy S4 - which captured 31.3 per cent of the smartphone market in the same period.

The news has hurt investor confidence in the company, with Apple stock dropping 3.57 per cent as the news broke - a continuation of a slide that has seen the company's value drop nearly 30 per cent in recent months.

Apple, for its part, has refused to comment on the claims, but with an iPhone 6 - or iPhone 5S - waiting in the wings, the company is going to have to work hard to win back customers from Samsung and other Android rivals.