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1/14/2013
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Apple Cuts iPhone 5 Part Orders In Half

Apple, responding to weak market demand, has sliced orders for iPhone 5 parts by as much as 50%.

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Apple has cut orders for components needed to build the iPhone 5, according to reports from both The Wall Street Journal and the Nikkei. The news comes on the heels of reports that Apple might be working on a lower-cost handset.

Specifically, Apple has asked Sharp, Japan Display Corp. and LG Display to reduce output of the iPhone 5's LCD panels by about half for the first quarter of 2013. Apple had originally asked for 65 million LCDs. Citing sources familiar with Apple's plans, both The Journal and the Nikkei suggest that the move is being made due to weaker-than-expected demand for Apple's latest iPhone. The change in plans was made last month.

Apple isn't just cutting back on display panels. It has also cut orders for memory chips.

If accurate, the reports would gel with what analysts have been saying with respect to demand for the iPhone 5, which is not selling as strongly as Apple hoped. Its stock price plunged ahead of the market's open on Monday.

[ Will Apple sell more iPhones if it introduces a less-expensive model? Read 8 Ways Apple Could Make A Cheaper iPhone. ]

Apple has not commented on or confirmed any of the reports. It is due to report its most recent quarterly earnings later this month. In the U.S., both AT&T and Verizon reported strong iPhone 5 activations.

Apple's share of the smartphone market has dropped over the course of the last six quarters. According to IDC, it held 23% of the smartphone market in the fourth quarter of 2011, and that had dropped to 14.6% by the third quarter of 2012.

At the same time, Samsung has become a powerhouse, overtaking Apple in smartphones and Nokia in total sales volumes across all types of phones. Samsung owned just 8.8% of the smartphone market in 2010 and held a commanding 31.3% by the third quarter of 2012.

The news isn't all bad: TIME magazine just named the iPhone 5 "Gadget of the Year."

TIME's Harry McCracken said it's all about the design. "The craftsmanship involved in creating the 5's hardware and software gives it its superior slant [compared to the Galaxy S III]. And it's this skilled combination which gives Apple's latest device its world class services."

The design of the iPhone 5 may be quite good, but Apple has handicapped itself by offering only one new phone each year. Samsung, by way of comparison, offers dozens of models each year. Samsung covers every price point, every screen size and every feature.

Whether or not Apple has in fact cut orders for iPhone 5 parts, it may need to step up the number of devices it introduces each year if it wants to continue to compete against Samsung in particular, and Android in general.

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ANON1238709573295
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ANON1238709573295,
User Rank: Apprentice
1/15/2013 | 11:11:32 PM
re: Apple Cuts iPhone 5 Part Orders In Half
Fan boy alert!
GAProgrammer
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GAProgrammer,
User Rank: Ninja
1/15/2013 | 8:53:32 PM
re: Apple Cuts iPhone 5 Part Orders In Half
Speaking of knowng what you are talking about, highest maket cap != most profitable company.

I agree with most of your comment tho.
Piablo
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Piablo,
User Rank: Apprentice
1/15/2013 | 3:30:20 PM
re: Apple Cuts iPhone 5 Part Orders In Half
If only everyone was like Mr. B. Edwards.... Is a locked battery cover and no memory card really your 2 most important features in a phone? Seriously? I wish I could do a psych profile on guys like you.... these odd Apple haters. We're talking about what kind of phone people prefer to use and you guys act like Apple is forcing a rectal probe on you. "Thankfully people are wising up..." Thankfully? because it was so dreadful that other people were buying a product you didn't like? Perhaps its that iPhone users could give two sh!ts what kind of phone an android user buys.
Honestly, get a grip and see a shrink.
Piablo
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Piablo,
User Rank: Apprentice
1/15/2013 | 3:12:11 PM
re: Apple Cuts iPhone 5 Part Orders In Half
It's a real shame "journalists" have lost so much character and credibility. It sure would be nice if the author of this junk would answer an honest question; is this article 1. an anti apple hit piece, 2. pure made up screed for the purposes of link bait, or 3. the author simply has no business background and is writing about things he does not understand and has no credibility reporting on?

Gadgetry is not business. The enjoyment of playing with toys and electronics does not make one a business analyst of electronics companies. Case in point: Eric suggests that Apple should emulate its competitor to improve business. Apple, the MOST PROFITABLE company IN THE WORLD, should emulate another company that is not as profitable. Now, the last I understood it, the purpose of business is to be profitable. Do i need to chew on this point any longer than I have?

RawBob
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RawBob,
User Rank: Apprentice
1/15/2013 | 12:24:06 AM
re: Apple Cuts iPhone 5 Part Orders In Half
Your linkbait lede:

"Apple, responding to weak market demand, has sliced orders for iPhone 5 parts by as much as 50%."

Then, in the text, you write:

"If accurate..."

Have trouble making up your mind. Did you consider the likelihood of that 65 million number? Did you realize that the WSJ has since retracted it?

Do you consider yourself to be a "journalist?"

majenkins
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majenkins,
User Rank: Moderator
1/14/2013 | 9:23:29 PM
re: Apple Cuts iPhone 5 Part Orders In Half
Amen. I was hoping some of the experts would back off a little on their Apple-itis but I guess not.
BEDWARDS972
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BEDWARDS972,
User Rank: Apprentice
1/14/2013 | 7:49:13 PM
re: Apple Cuts iPhone 5 Part Orders In Half
Goes to show that consumers are smarter and more practical than "experts" like Harry McCracken. It's not all about design, it's about functionality like removable batteries and memory cards and choice in form factors, and not being locked into iTunes. Apple's model got the smartphone market going, but it fails in the face of real competition. Thankfully people are wising up and Apple will be forced to change or it's back to niche player.
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