Apple (APPL) and the iPhone 5 have been the center of speculation this week ever since the Wall Street Journal report that the company had cut parts orders for its latest model by as much as a half. Now a respected market research firm is suggesting that Apple grossly overestimated demand for the iPhone 5.
According to DisplaySearch, the initial iPhone 5 production run was too big to sustain, as Brooke Corthers reported at CNET. Paul Semenza, senior vice president of analyst services at DisplaySearch, said the firm started to hear about cutbacks just before New Year’s:
“It was a very quick ramp up. The Q4 [estimate] was originally about 61 million displays [for the iPhone 5]… that may be dialed back, but anything near that number is still huge,” he said, referring to an estimate of display shipments for the iPhone 5.
“That would support the theory that the ramp was too much to sustain.”
In comparison, in the last calendar quarter of 2011, during which the wildly popular iPhone 4S was announced on October 4, Apple sold 37 million units.
When the iPhone 5 was released, Apple said that pre-orders sold out 20 times faster than previous versions. The company might have had reason to think that demand for the iPhone 5 would be far larger than that of any previous model. And yet the sale of 61 million displays would suggest that Apple had expected nearly double the sales at a time when Google (GOOG) Android-based units were dominating global smartphone sales. The question is whether Apple was overly optimistic in setting its orders
.Apple’s stock has taken a beating since the Journal report on Sunday. It currently sits around $486, below $500 and far off the high of $705.07 earlier in the year.
FORBES: Apple Says iPhone 5 Demand Outstrips Supply As Pre-orders ‘Shatter’ Previous Records
Image courtesy of Apple
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