Shares fall after Apple cuts iPhone 5 components orders
Is the iPhone 5 really that much of a flop? Some analysts believe share price drop is 'overdone'
APPLE has slashed the number of components it has on order to manufacture iPhone 5s because of a slump in demand for the smartphone. The Daily Mail reports that the California-based company has cut the number of screens it has ordered by 50 per cent. Other component purchases have also been reduced.
Shares in Apple dropped sharply yesterday on the news down 3.57 per cent to $501.75 per share, the lowest since last February.
The disappointing sales of the iPhone 5 have been down in part to the soaring success of South Korean rival Samsung's Galaxy smartphones.
Some analysts said the fall in share prices was overdone because it was impossible to say what levels of inventory Apple had built up. Halving orders would normally imply a total collapse in sales, said Benedict Evans, analyst at Enders Analysis, but "there is simply no sign of that".
Apple made a similar cut in parts orders after the launch of the iPhone 4S in 2011 and yet that went on to be a strong seller, other Apple watchers said.
Another explanation for a cut in screen orders could be that fewer LCDs were being thrown away because of malfunctions.