Has the Demand for iPhone 5 Peaked?

Turns out that the demand for iPhone 5 isn’t as high as Apple had expected, at least according to sources cited by The Wall Street Journal. One source said Apple notified its suppliers in December that it will reduce iPhone 5 screen and other component orders by roughly half in the January–March quarter.

When iPhone 5 launched there were concerns that Apple’s three screen suppliers (Sharp, Japan Display Co., and LG) suppliers wouldn’t be able to meet the high demand for the handset.

You may recall there was indeed an iPhone 5 supply shortage until the holiday shopping period. First reports discussed display suppliers failing to meet demand (later denied) until a Foxconn executive solved the mystery surrounding it it by admitting the manufacturing company was the cause of iPhone 5 not reaching its new buyers.

The Foxconn official said that iPhone 5 is the most difficult device the company has ever had to assemble, triggering productivity issues and new quality-check procedures and slowing down production.

This, however, was just a partial explanation of the iPhone 5′s “weak” performance. Meanwhile, analysts remain skeptical about the success of Apple’s latest handset, although studies published by different market research companies such as comScore, Kantar WorldPanel Comtech, Chitika, and more have shown the iPhone 5′s success is unquestionable.

Does this mean the demand for the iPhone 5 has peaked? The Wall Street Journal article seems to suggest just that, while Apple’s biggest competitor, Samsung, is living its renaissance.

According to IDC’s most recent report, the South Korean manufacturer Samsung retains 31.3% of the global smartphone market, while Apple grabbed only 14.6% (a number that’s growing). Samsung is projected to reach 35% of market share this year and to report another record operating profit for the 2012 holiday quarter.

[Via: The Wall Street Journal]

Written by Istvan Fekete, edited by Michael DeLisi