Apple cuts LCD panel orders for iPhone 5 but is there more to it than meets the eye?

Apple has reportedly cut orders for LCD panels for the iPhone 5 from Japan Display, LG Display and Sharp. Nikkei reports that the orders have been cut down by as much as 80 percent from Japan Display and 40 percent from Sharp when compared to the orders during October-December period. This has led many to think about weakening demand for the iPhone 5, which would have a big impact on Apple’s stock price considering the iPhone accounts for over half of Apple’s revenues. But is there more to it than meets the eye?

Historically, we see demand for the iPhone waning in the first quarter of the year onwards, coming out from the Holiday season followed by buyers holding out for the next generation iPhone. So this move by Apple might not really come as a surprise to many who follow the company.

More crucial, however, is it could be a pointer towards Apple changing its policy of launching just one iPhone model every year. Analysts have earlier claimed that Apple could launch the iPhone 5S as early as June rather than the October schedule it was forced to follow after the iPhone 4S launch got delayed in 2011. The iPhone 5S is also rumored to use a new display technology called Touch On display instead of in-cell display that was introduced with the iPhone 5. Apparently the yields of in-cell display is not as good as Apple would prefer and was also linked to the initial shortage of the iPhone 5.

Considering all these things, we are not surprised with Apple cutting orders with its display vendors. Apple will announce its quarterly earnings next week, where it is expected to announce selling over 50 million iPhones in the last quarter.

Photo Credit: Eshan Shetty

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