No, the iPhone 5 is not suffering from weak demand: Analysts

by FP Staff Jan 17, 2013

Recently Wall Street Journal and Japan’s Nikkei had reported that Apple asked suppliers Japan Display Inc, Sharp Corp and South Korean company LG Display Co Ltd, to cut supply down for iPhone 5′s LCD panels.

The report in the Japan daily had said that Sharp’s dedicated facility for iPhone 5 LCD panels in Mie Prefecture would lower production in January and February by about 40 percent from the October to December quarter, when it was near full capacity.

The rumours also added that the cut down in supply was due to low demand for the iPhone 5. This in turn saw Apple’s stock take a battering and for the first time in 11 months, its price fell below $500.

But it seems some analysts are disagreeing with these reports of low demand. According toApple Insider, Analyst Shaw Wu with Sterne Agee revealed in a note to investors on Tuesday that his checks with suppliers indicate that demand for the iPhone 5 “remains robust.” 

The report also adds that Mark Moskowitz of JP Morgan said the reports are just “more noise” that will prompt investors to overreact.

There have been reports that Apple is also launching a cheaper version of the iPhone. (You can read more on that here) However Apple’s marketing chief Phil Schiller had dismissed such rumours saying Apple would not resort to such tactics just to expand its market share.

Many have felt that Apple needs to expand its market by launching some cheaper devices. Google’s Android has a number of cheaper options which has added to its success. In fact Apple’s former CEO John Sculley has spoken to Bloomberg, stating that “As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably.”

There are also reports that Apple has already begun testing iPhone 5S and a cheaper iPhone as well.

Apple is holding a conference call to discuss financial results of its first fiscal quarter on 23 January.

Source firstpost.com