Apple Cuts iPhone 5 Parts Orders By 50% – Is It A Sign Of Big Apple’s Fall?
Despite record sales of the iPhone 5, Apple is finding it hard to meet expectations. The general consensus is that Apple is no longer the company it once was which generated record profits despite the economy and market situation.
The perception is not being helped by the recent reports that in order to wrest some market share from Android, specially in emerging markets, Apple will come out with a cheaper version of the iPhone. This could mean a lower profit margin on each device it sells. There is also the fact that competition, specially Samsung, has caught up with Apple and Cupertino giant is the one playing catch up instead of leading from the front.
Now the Wall Street Journal has reported that due to a lack of demand, Apple has cut the orders for components that go into the iPhone 5. The order for iPhone 5 screens was cut by 50% and there were reductions in other parts as well. This didn’t go down well at Wall Street where Apple’s share price dipped below $500 in almost a year.
There are some outfits who are suggesting that the reduction is simply because quality control has not kept pace with the production. This is plausible since we already know that the iPhone 5 is a challenging product to produce simply because of it’s design, materials and construction.
“Our checks with supply chain contacts close to the situation identified a very different cause: a slower ramp in the manufacturing of iPhones and iPads (reflecting some quality control issues) and insufficient production lines,” said Joane Feeney of Longbow Research.
Apple has sold over 50 million iPhones over the last quarter of 2012. Do you think Big Apple will ring higher numbers in 2013?