iPhone 5 display shortages may be why Apple 'only' sold 5 million handsets in 3 days

iPhone 5 display shortages may be why Apple 'only' sold 5 million handsets in 3 days

Summary: Five million iPhone 5 handsets sold over three days wasn't enough to satisfy Wall Street's stratospheric expectations. However, according to two analysts, Apple might have been able to sell more handsets had it not been for shortages of the new display.

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Apple sold 5 million iPhone 5 handsets over the three days of the launch weekend -- a figure that disappointed many Wall Street analysts -- but the Cupertino consumer electronics giant powerhouse might have been able to sell more had display shortages not put a kink in the all important supply chain.

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With the introduction of the iPhone 5, Apple switched to a new display technology called in-cell screen technology. This takes the display and the touch sensor and integrates it into a single unit. This technology makes the overall display thinner, but it also makes it a little more expensive to produce. It's also new technology, and this means that the displays are more difficult to make, with yields being lower that expected because of defects, and it is this factor that is contributing to supply chain bottlenecks.

As reported by Bloomberg, several analysts blamed the new in-cell display, manufactured by LG Display and Japan Display, for Apple only being able to sell 5 million units over the three days.

"Apple is facing significant production constraints due to a move toward in-cell display technology," said  Ben Reitzes, an analyst at Barclays. "Apple is struggling to keep up with demand". He went on to claim that about 10 million in-cell panels would be available to Apple during the third-quarter period.

"They [Apple] needed to get a lot of products in the door during a tight window, and these supply constraints that were talked about probably did have some impact,' said Tom Dinges, senior principal analyst at IHS iSuppli.

"It’s a problem that everybody else would love to have," Dinges continued. "Even if you are going to run in to some areas where there are supply shortages, Apple is going to get a disproportionate amount of the available supply -- they [Apple] are your best customer".

Apple CEO Tim Cook doesn't see a reason to panic. In a statement he said that "we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible". Cook went on to say that "while we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date."

In other words, if you want one, order it, stand in line, and you'll get is as soon as it is made.

Image source: Apple.

Topics: Apple, iPhone, Smartphones

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57 comments
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  • The flip side

    is that Apple has every Chinese plant running at full capacity and all resources spoken for just as the Windows phones are about to start production...
    Tony Burzio
    • They are too busy supplying WP8 displays

      ... so they have to put Apple ones aside. It's understandable.
      LBiege
      • Microsoft is not going to sell phones... maybe a few...

        just wait and you will see.... we (apple) have the supremacy... we can make wait people... the time WE want.... nothing is better than an iPHONE...

        Period
        dkaparunakis@...
        • Nothing's better than the iPhone 4S?

          since not much has changed. Except an extra row of icons and a crappy mapping app, plus panoramic camera that Galaxy SII has had for a year doesn't sound like it's any better than what preceded it.

          Tell me again how 23% market share on iPhone vs 60+% for Android gives Apple supremacy? Oh, you were talking about the supply chain. Yeah, don't think Samsung is having supply chain problems. But Apple does get many of it's parts from Samsung.
          tallbruva
          • How about 71% of smart phone profits?

            I'll tell you how. Apple has 71% of the world's smart phone profits while you're counting the cheap little trinket Android phone models around the world. As typical of Apple when they implement something it's superior, like the panoramic camera which is better than Samsung's. Also out today 22% of Android users announced today are opting out of Crapdroid and moving to iPhone. Choke on that.
            pgentry53
          • pgentry53

            Like you have said 23% market share but 71% profits, so that is telling me that the iTem is bit overpriced. If you are eager to contribute more to the richest company in the world, go for it. We practical people will buy cheaper stuff.
            ladislaver
          • NUMBERS?

            Over 500 million Android phones in service, and over 1.3 million coming on line EVERY DAY click, click, click. And none of them have iLost maps. This is not just a little fanboy flurry when a new model launches.
            bigpicture
          • overpriced

            ((( "Like you have said 23% market share but 71% profits, so that is telling me that the iTem is bit overpriced." )))

            Try taking an economics class sometime. In particular, the topic you most need to comprehend is called "supply and demand."
            buddhistMonkey
        • You also have a great Map

          I know. Yeah, supremacy.
          LBiege
          • Plus all the best in the world tech

            that pretty much matches the other market-leading handsets of the moment.
            Ibrick = great hardware but unless you're a true itard, saying nothing compares is a little short sighted. My SGS3 is the best phone that will ever be released - see, I can talk BS too.
            Little Old Man
          • A dropped subject

            Are you talking about the Shamsteal Galaxative S(hatter)III one drop disaster with the exploding battery cover? Yeah just don't drop that frajeelay thing.
            pgentry53
          • Circling the drain

            Apple will be kicking Google Maps butt in another year of refinements and data improvements. A non-issue only a true Fandroid would exploit as if Google Maps were perfect in Version 1.0. (Having said that many people don't even know what the fuss is about since Apple Maps works perfectly for them. Not like it's a complete disaster.) Plus taking away their ad money. Google and Android are circling the drain of tech history.
            pgentry53
      • Too busy...

        Apple has already sold 5 million units, in one weekend. I will be very surprised if that many Windows Phone 8 units sell this YEAR.
        rphunter42
      • Baker's dozen

        Why? Microsoft only needs about a dozen screens to satisfy the demand for their phones.
        pgentry53
  • This is all BS....

    Do you think Apple does not know that they may sell alot and not be prepared for it?...They did have a full one year to iron out the kinks...I sometimes feel people who write this stuff don't really use their noddles!!!!
    Nsaf
    • Hey, use your noddle and while you're at it your noodle too!

      Do you not think Apple waited as long as it could to perfect this phone before issuing the command to start manufacture? Any idea how long it take to make "just" 5 million phones? There is such a thing as lead-in and manufacturing time to consider but typical Fandroid takes no prisoners and refuses logic.
      pgentry53
  • No wow factor....

    Maybe it is because iPhone5 is not an amazing thing this time. Honestly if you are a dieheart fan on Apple, it does not have the wow factor. I got one but returned it 2 days later. I still like my 4S much better.
    Nsaf
    • Wow factor?

      Nsaf, I can only say I think you didn't give it much of a test. It is twice as fast as the 4S, lighter, and has a larger display. That alone is reason enough for me to pass my 4S to my wife and buy a 5 when they are back in stock.
      rphunter42
      • Excessively pampered not impressed

        Yeah no kidding. Those droll pampered jaded souls who returned the iP5 saying it didn't have enough wow factor must be blind as a bat. My black one resembles the 2001:A SPACE ODYSSEY monolith. It's gorgeous and way nicer than my iP4. Great features and improvements.
        pgentry53
    • Really? I have one and there is wow factor.

      I have been a smartphone user since the Treo 300 and an iPhone user since the 3G. This is the most meaningful upgrade to a smartphone since the Treo upgrade from 650 to 700.

      The screen is bigger but the phone feels smaller. The camera is much better even with the lack of a megapixel upgrade. Siri is much quicker. Most important, the thing just feels awesome to hold.

      Before everyone starts screaming Apple fanboi, I am routinely critical of Apple, and they have done some really stupid things with this launch as well. While maps needs lots of work, for me the biggest issue was not being ready with extra lightning charging cables. I now have ONE cable to charge my phone with; better bring it with you!

      Issues aside, the iPhone 5 kicks serious a$$. If you are talking smack about its lack of "newness", you haven't touched it.
      dcristof