Apple Stock Price Drops as iPhone Sales Disappoint

Dennis Faas's picture

For the first time in almost a year, the price of a share of Apple Inc. has slipped below $500. The reason: the Cupertino, California-based firm recently cut back on its orders for components of its latest iPhone.

Apple recently reduced the number of liquid crystal display (LCD) screens it wants manufactured for its iPhone 5 smartphone, which launched in September, 2012.

iPhone Suppliers to Cut Production in Half

Originally, Apple had requested its suppliers provide approximately 65 million of the iPhone screens. Now, it appears the firm requires only half that many.

These manufacturing orders are typically filled by Japanese parts suppliers Sharp Corp and Japan Display Inc. Observers now expect these firms will temporarily reduce their output by as much as 80 per cent.

On Wall Street, the result of this news was a four per cent decline in Apple's stock. That represents Apple's lowest share price since February, 2012.

Some analysts are linking Apple's order cutbacks to a) slow iPad and iPhone sales, and b) problems with the quality of the LCD screens being delivered for use in these devices.

"Our checks with supply chain contacts close to the situation identified a very different cause: a slower ramp in the manufacturing of iPhones and iPads (reflecting some quality control issues) and insufficient production lines," noted Longbow Research analyst Joane Feeney. (Source:

Popularity of Samsung Smartphones Rising

Most observers blame slow iPhone 5 sales on rising competition from South Korean technology firm Samsung. Thanks to the popularity of its new 'Galaxy' devices, last year Samsung overtook Apple to become the world's number-one seller of smartphones.

Samsung recently announced that sales of its Galaxy S smartphone had surged past the 100 million unit mark. The firm also noted that it had sold 40 million units of its Galaxy S3 smartphone, which was first released in May, 2012. (Source:

Many analysts believe Samsung will increase its sales lead over Apple in 2013. Research firm Strategy Analytics, for example, recently predicted Samsung will sell almost 300 million smartphones in 2013.

By comparison, Apple is projected to sell fewer than 200 million of its competing devices.

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