Weak iPhone 5 Demand Prompts Apple To Cut Component Orders

For more than two years, the iPhone 5 remained at the height of buzz and anticipation in the tech community. However, the fever pitch to which the iPhone 5′s hype ascended to appears to be falling just as fast.

News of flagging iPhone sales in itself is not a surprise for those who follow iPhone news and rumors: as the excitement and anticipation over a new iPhone ratchets up, current iPhone sales ratchet down. It is the bitter end of a bitter-sweet effect that Apple enjoys from its frenetic and often fanatical following from both the tech media and its customers. Even Apple CEO Tim Cook has admitted in interviews that the buzz of yet-to-come products is a palpable part of the revenue cycle that Cupertino has come to expect when planning their release schedules.

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However, no one would have ever guessed that after just a few months on the market, the iPhone 5 would already see a sharp downward trend in sales demand, prompting Apple to significantly scale back component orders. Could this market condition spur on Apple to release the iPhone 5S earlier in 2013?

There hasn’t been any word on production for the iPhone 5S, and we’d ostensibly have to see the beta version of iOS 7 pop up sometime in the early spring for a June iPhone 5S release to be a realistic shot. But the news regarding the iPhone 5 isn’t good for Apple. According to Forbes:

“Apple’s orders for iPhone 5 screens for the March quarter are about half what the company had previously planned. One obvious reason for the softer iPhone 5 demand: huge demand for Samsung phones, and a growing interest overall in Android phones with extra-big screens. IDC notes that Apple in Q3 accounted for 14.6% of worldwide smartphone shipments, from form a peak of 23% in Q4 2011 and Q1 2012. Samsung’s share reached 31.3% in Q3, up from 8.8% two years earlier.”

“Half” is a shocking number. To think that anything concerning the iPhone 5 is off by 50% — after such excitement over the device — is amazing stuff. Even iPhone 4S component orders were never reported to have been so sharply cut in the run-up to the iPhone 5 release. And all throughout the summer, consumers had plenty of looks at the new iPhone 5 form factor.

Forbes seems to think that the decreased demand has much to do with Samsung’s success in the smartphone sector, thanks to their larger-screed devices:

“While the iPhone 5 has a 4 inch screen, up from the 3.5-inch display used in earlier models, some Samsung models have screens larger than 5 inches; Huawei showed off a phone at CES last week that topped 6 inches.”

But this is just a theory, and there are others that abound as well, such as Samsung’s lesser-priced options in the smartphone sector. The result of all these theories is that the 5S rumor mill is now running amok with rumors of multi-sized screens for the next iPhone, as well as an el cheap-o iPhone. Maybe even a pre-paid version.

Few analysts, however, appear ready to admit that the stagnant economies in the U.S. and Europe are having an effect. Consumers in both regions have less money in their pockets, thanks to rising taxes (the U.S. was recently hit with an across-the-board payroll tax signed into law by President Obama), growing inflation, stagnant job growth, and an overall economic malaise. The iPhone 5 was released in the midst of all this. And now that Christmas has passed, the will to shell out the big bucks for the iPhone 5 may not be there.

Another possibility is that the iPhone 5 could simply never live up to the hype that the rumor mill created for it over the two years that people covered its eventual release. Such a long layover for the iPhone led people to anticipate a next-generation mobile device that even Apple could never have lived up to. After the first wave of early adopters, perhaps a sense of “is that all there is?” pervades the consumer sentiment?

Whatever the answer is, it remains to be seen what Apple will do in light of the iPhone 5 sales slowdown. If the outlook in the first quarter of 2013 is already so bleak, perhaps the next iPhone will indeed debut once again in June, at this year’s WWDC, if for no other reason than to avoid a long, hard sales slog for the iPhone 5 throughout the year.

Via: iPhone5newsblog