Apple iPhone 5 missed the weekend sales expectations as it sold 5 million units, instead of the estimated 8 million. However, this miss can be attributed to Apple itself, rather than poor response.
Apple iPhone 5 sales missed market expectations over the weekend as 5 million devices were sold worldwide, as compared to 8 million units that were expected. However, this miss was not due to a lukewarm response to the latest iPhone, but due to Apple's own decisions. The gap in demand and supply is due to the shortfall in the in-cell touchscreens that Apple is using for the first time, reports Bloomberg. In-cell display technology essentially does away with a layer of screen in the phone and makes it thinner and lighter.
According to Bloomberg, "Producing in-cell screens is also more painstaking than earlier screen types, contributing to bottlenecks." Bloomberg quoted the senior principal analyst if IHS iSuppli, Tom Dinges, "They 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."
Bloomberg's report said, "Apple had also enlisted Sharp to round out its suppliers and lessen reliance on longer-term partner LG Display. Yet the Japanese company is struggling to reduce defects in screens that include the new technology and was unable to start shipments before the iPhone debut, according to Barclays."
The report in Bloomberg said that Japan Display, another Apple partner, was facing troubles in making the in-cell touchscreens for the iPhone 5. The spokesperson for Sharp, LG Display, Japan Display and Apple did not give comments.
In a research note, Ben Reitzes, an analyst at Barclays, wrote around 10 million units of the in-cell screens were earmarked for the third quarter of 2012. Market experts had previously expected Apple to retail around 8 million iPhone 5s in the first weekend of launch, though the sales for the first three days missed the mark and ended at 5 million.
Dinges, however, said that this shortage may not be a long term problem and that Apple will get preferential treatment from its suppliers. Apple's CEO Tim Cook, on its part, said that it is making efforts to meet the huge demand for the iPhone 5.
Barclays said that if the supplies for in-cell touchscreen become streamlined, Apple may be able to sell 45.2 million iPhones in the coming quarter, and the figure could cross the 170 million mark by September.
However, in-cell touchscreen is not the only component responsible for the iPhone 5 shortage. According to Bloomberg, "Another component that may be causing challenges is the new baseband chip that helps the iPhone 5 connect to LTE, or long- term evolution, wireless networks."
The report states, "Qualcomm has said supplies of those parts have been constrained as it moves to a new manufacturing process to build them." Emily Kilpatrick, a spokesperson for Qualcomm refused to comment.
Another problem, according to Bloomberg, is that Foxconn has a labour shortage, which means that there are not enough people to assemble the sixth generation iPhone. The CEO of iFixit, Kyle Wiens, said "Ramping up to build another million phones isn't an easy prospect."
Would love to here from you...