Apple Reportedly Experiencing Weak Demand for iPhone 5, Component Orders Severely Reduced
It often seems like stories about the demand for Apple’s iPhone end up being very one-dimensional. Usually, we’re talking about customer demand that’s off the charts and Apple’s struggle with suppliers to find parts and get the devices made in a timely manner… But that’s not always the case, as we’re seeing today with Wall Street Journal reports of “weak demand” for iPhone 5 and reduced component orders.
Before you go writing off these reports, consider that the WSJ is talking about cutbacks of about half of Apple’s usual 4-inch screen orders (and other components). This reduction applies for the January-March quarter, and has analysts scratching their heads about a cause. It would seem the weak demand might stem from the cheaper iPhone rumors that have resurfaced as of late. Why spend top dollar for an iPhone 5 when a newer, cheaper device might be coming down the pipeline (and with a bigger screen?!).
At least on other analysts dismissed the idea that iPhone 5 demands are softening. J.P. Morgan analysts Mark Moskowitz suggested that order cuts could mean better manufacturing yields and less component wastes when assembling the iPhone 5.
If this softening in iPhone 5 demand holds true, the history of the iPhone 5 might turn out to be unimpressive relative to Apple’s other marquee releases. After catching up with demand about a month ago, the iPhone 5 has apparently become a little too available, and while it was bound to happen, this comfortable position probably isn’t something Apple hopes to make standard.