Apple slashes iPhone 5 component orders

Summary:Apple has cut back orders for iPhone 5 components according to the Wall Street Journal, signalling its expectations for the iPhone 5 may have been too high.

Apple has cut orders for parts for the iPhone 5 due to weaker than expected demand, sources have told The Wall Street Journal.

The Cupertino-based company cut back orders with suppliers in December, with iPhone 5 screens for the January to March quarter cut to half the levels the company had previously expected, sources told the paper.

The reported cuts follow warnings from December that Apple's iPhone 5 inventory for the first calendar quarter of 2013 was looking bloated to more phones than necessary being built in the December quarter, according to Citi analysts.

Jefferies analyst Peter Misek noted at the time that iPhone component orders for the first quarter had been slashed from 35-40 million to around 25-35 million units, despite lingering shortages among retailers, according to Forbes.

Samsung rivalry

The reported component cuts come as rivalry between the world's largest smartphone maker, Samsung, and Apple intensifies.

Samsung on Monday  announced it sold more than 100 million of its Android Galaxy S series devices since their launch in May 2010.

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The company boasted on Flickr that sales for newer generation devices are accelerating, claiming to have sold 30 million Galaxy S III handsets in five months and 40 million in seven months, giving it an average run rate of 190,000 devices per day.  

Samsung shipped twice as many smartphones in the third quarter of 2012 as Apple, consolidating its lead with 31.3-percent share across the globe, according to analyst firm IDC .

The pair are also battling it out in the all important Chinese market. Apple chief Tim Cook visited China last week to continue talks with China Mobile -- the nation's largest mobile operator by subscribers, which whom Apple has yet to strike a distribution deal.

Cook told media there he expected China to become its largest market, and planned on boosting its retail outlets from the current 11 to over 25 in the near future.   

Apple will release its first quarter results for 2013 in the next fortnight. A recent survey of 57 analysts by Fortune shows the median expectation for iPhone sales for the quarter to December 29 is 49.5 million, up 45 percent on last year.

Topics: Apple, iPhone, Mobility, Samsung, Smartphones

About

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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