Report: Apple drastically cuts orders for iPhone 5 displays

The announcement of the iPhone 5 in September 2012 was the biggest one yet for Apple's iOS smartphone, thanks mostly to the new design of the phone that increased the size of its screen from 3.5 to 4 inches. Now a new report claims that Apple has cut down the orders of that same LCD screen from its third party manufacturers.

Reuters reports that, according to what unnamed sources told the Nikkei Japanese news service, Apple had originally told Japan Display, Sharp Corp and LG Display that they would need a total of about 65 million units of iPhone 5 displays in the current quarter. The report says that Apple has now told those display suppliers that those unit orders have been cut to almost half that amount.

The story goes on to say Japan Display's factory will reduce its output to as much as 80 percent for the current quarter, while Sharp will reduce its output by 40 percent.

If these reports are indeed true, it's likely that sales of the iPhone 5 have not met Apple's previous expectations. Some have speculated that the lower prices of many Android and Windows Phone-based smartphones are now eating into the iPhone's market share. There are persistent rumors that Apple is planning to launch a new version of the iPhone that will have a lower price to better compete with these budget smartphones.

Source: Reuters | Image via Apple

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So for all the fanboys talking about how great the iPhone 5 is selling? ITS NOT. Apple and analyst said Apple would sell 50M+ iPhone 5's and the fact is they may only sell 35Mter a while. .

Selling people the same phone 3 years in a row gets boring. Maybe 25M people didnt have the 4S. But if you had a 4S the 5 offers nothing new except 1 extra row of icons, and the headphone jack at the bottom

vcfan said,
look at all the excuses flowing. I love it.

Share price to protect!

Down over 3% today alone...might end below 500. LULZY to all the clowns crowing about how it would hit 1000 a few months ago.

Man, their stock is getting donkey punched right now. Probably going to rebound after all the news places finish their me-too articles over this.

Xilo said,
People are starting to realize that Apple can't innovate.

that's true but as long as owning an iphone gets you a social status bump, people will buy it no matter what.

Praetor said,

that's true but as long as owning an iphone gets you a social status bump, people will buy it no matter what.

Social Status bump? What are you, in high school or something? When you join the real world you will learn how meaningless that **** is. Instead you just buy the phone that works the best for you and stop judging others for what phone they purchased. I know that is especially hard for the Apple haters to accept because they are still stuck in their own reality distortion field, but try to break free, ok?

wow, just wow...such a bold post from you, isn't? Answering you:

Shadrack said,

Social Status bump? What are you, in high school or something? When you join the real world you will learn how meaningless that **** is.

no, I'm not in high school from more than a decade thanks. And yes, I've joined the real world a long time ago... and here's something you probably don't know: high end gadgets *will* get you a social bump, either at school, work or your circle of friends. Why? because it's expensive, meaning you have the money to buy it. That's more evident in certain cultures than others, though.

Shadrack said,

Instead you just buy the phone that works the best for you and stop judging others for what phone they purchased.

Now you got me puzzled; i have no idea that i was "judging others" for their choices in the post I've made and even more, i have to "buy that phone that works best for me" since you tell me? wtf that has to do with the post I've made? oh well, moving on.

Shadrack said,

I know that is especially hard for the Apple haters to accept because they are still stuck in their own reality distortion field, but try to break free, ok?

Apple haters? Really? LOL

OHOH Pop goes the iPhone 5 bubble... lets face it .. there is no sugar covering this ! They thought sales would be amazing as its the new iPhone 5.. with nothing new really short of size. No amazing new inovation. I love my Apple products but would never buy a 5!!

If any of these so called reports do any research they would find out that it's a standard thing companies do after holiday quarter and newly launched products for Apple.

True, they're also planning to use these for the newer ipad 10 inch model. Thinner screens with the body of the ipad mini style.

sinis said,
lighter but larger than 10 inch iPad will be awesome.

You propose a clunkier iPad with less battery life?
What for? (serious question, I'm curious to know why 10" on a(n iOS) tablet aren't enough)

GS:mac

Well, that's what killed it's PC market share, but they chose the proifit-margin, built-in obsolescence model for the most part. With regards to mobile devices, I think Apple and Microsoft will be hurt by cheap Androids in this economy. And some people buying Androids wouldn't be able to afford the higher priced devices in a good economy. And as those cheaper devices perform or even outperform the higher priced devices, it will get even worse for them. The only bad thing about this .... Google is the devil. ;>

Microsoft likes Apple's structure, that's why they're trying hard to match every aspect of Apple's ecosystem. It will take time, but Microsoft will be fine in terms of market shares, but Apple will always have the highest profit out of anyone. Event Google can't make any money off Android of its services.

You are right, but MS can't control the hardware, and there is OS competition, but they will try to micro-transaction us to death, that's for sure.

Having said that, I'd be happy to pay $9.99 for Zune for Windows 8 to synch my Desktop, Windows Phone 8, and Surface RT with my media library and playlists with one piece of decent software.

Such a dramatic cut surely won't be down to sales alone as opposed to a different strategy. Unless the iPhone 5 really was that underwhelming in sales, but if it was, I would had read about it everywhere. Alternative supplier perhaps, or they are abandoning the current sized screen for the next generation.

Is all speculation.

I'm not going to jump to any conclusions but I think that this, if true, is a mix of lower than expected demand for it plus apple getting ready to redo things with a 5s re-spin in June or July.

GP007 said,
I'm not going to jump to any conclusions but I think that this, if true, is a mix of lower than expected demand for it plus apple getting ready to redo things with a 5s re-spin in June or July.

Wouldn't a 5s use the same parts? Like the 4s did?

I believe the same, as 1080p phones are on launch this year and a lower price, so that un-standard resolution from iPhone 5 is far behind the market.

GP007 said,
Actually I think a 5s will have a res bump so the iPhone can get up to or pass the newer 720p smartphones out now.

I doubt they will bump the resolution. They wouldn't need to as Apple has already shown that at 10" the human eye can't perceive individual pixels so long as it is at least 300ppi. They even put a trademark on the idea and called it a Retina display. So according to Apple, increasing the PPI wouldn't add anything to the user experience.

it just takes time, especially when we're dealing with not just a technological appeal but something that to a lot of people blurred the line between 'a gizmo to get stuff done' and 'this will make me look cool' fashion accessory. But like all fashions, they change.

We've seen this before, with the original Motorola RAZR. One minute, it was the hottest thing since sliced bread. The next, it was a commoditized featurephone.

The iPhone is stickier than any featurephone, due to apps. The trouble is that most apps are free.

I actually see the iPad as having much better staying power than iPhone. Because consumers pay full price for iPads rather than an artificially low price subsidized by the mobile carriers, they will value them more and won't replace them as quickly.

The consumer pays for price for the iPhone but that cost is hidden from them. In reality they are paying for it month-to-month by the expensive post-paid contract plan.

Walmart is financing unlocked iPhone 5s right now. You can purchase one for no money down, and then 26-month interest free with a $25/month minimum payment. With StraightTalk's 'unlimited everything' plan that comes out to $70/month which is still better than AT&T's lowest priced plan. Plus, since the iPhone is unlocked, if you don't like StraighTalk you can switch to any other GSM provider (I think it also has a CDMA antenna but I may be wrong). The financing is separate from the service. I would like it if the whole industry worked this way. Right now the post paid providers would like to keep everything as ambiguous as possible.

TomJones said,
We've seen this before, with the original Motorola RAZR. One minute, it was the hottest thing since sliced bread. The next, it was a commoditized featurephone.

The iPhone is stickier than any featurephone, due to apps. The trouble is that most apps are free.

I actually see the iPad as having much better staying power than iPhone. Because consumers pay full price for iPads rather than an artificially low price subsidized by the mobile carriers, they will value them more and won't replace them as quickly.

Accept the original RAZR sold 50M+ in a single year, and no one single model of the iPhone has at all.

TomJones said,
We've seen this before, with the original Motorola RAZR. One minute, it was the hottest thing since sliced bread. The next, it was a commoditized featurephone.

The iPhone is stickier than any featurephone, due to apps. The trouble is that most apps are free.

I actually see the iPad as having much better staying power than iPhone. Because consumers pay full price for iPads rather than an artificially low price subsidized by the mobile carriers, they will value them more and won't replace them as quickly.

The iPad 2 was better than the original, it was worth the buy maybe. The 3 was way way better than the 2, if a better screen with double the res is a big deal to you. The iPad 4 is worse than the 3 as all you got was a better CPU basically. iPad 5 will sure bring back a screen like the 3 had and all the 4 buyers will start again.

Production cuts mean low sells, especially when a new model is coming or is expected soon.

Tho I think there's more to it than this, they're probably just cost cutting, and will order more if they use up the current stock.
(Good business sense imo, as opposed to having surplus and getting stuck with it if it doesn't sell, not that I doubt it wouldn't sell)

If it's all about cost cutting, then ordering less (presumably at a higher unit price) wouldn't help much. At the end of the day, if they're ordering on a quarter by quarter basis, why would they order twice as many as they needed? They wouldn't.