iPhone Component Suppliers: Has Apple Cut iPhone Component Orders?

iPhone Component Suppliers: According to a report by The Wall Street Journal, Apple Inc. (NASDAQ:AAPL) has cut component orders for the iPhone 5. With “weaker than expected demand” it is safe to say the company has to be a bit disappointed with where sales stand.

According to those familiar with the situation, “Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order.”

Apple Inc. (NASDAQ:AAPL) Press Info

The article goes on to explain that “The Cupertino, Calif., company has also cut orders for components other than screens.”

While this may be news to most people, it appears that the company actually notified suppliers of this sometime during the month of December. In other words, Apple Inc. (NASDAQ:AAPL) has known for roughly one month that there was trouble on the horizon.

Why has this happened? Is this due in some part to stiff competition from industry competitors?

Here is an excerpt from the same article:

“The move comes as the company has been facing greater challenges from Samsung Electronics Co. and other makers of smartphones powered by Google Inc.’s Android operating system. While Apple has set the agenda for the smartphone market since it released its first iPhone in 2007, South Korea’s Samsung, which sells many Android-based models at various price points, has already overtaken the U.S. company as the world’s largest smartphone vendor by market share. Demand is also growing for inexpensive smartphones from Chinese makers such as Huawei Technologies Co.”

Could there be another reason for this change? Could this signify the possibility of a cheaper iPhone come 2013?

While this is still unclear, the people at AppleInsider believe it to be a very real possibility:

“It is unclear what exactly is to blame for the reduction but ongoing rumors point to the possible introduction of a cheaper model to the iPhone line sometime in 2013.”

Of course, Apple Inc. (NASDAQ:AAPL) is not the only company struggling with this news. The actual component makers are sure to take a hit as well. The question is: will these companies be able to find alternate work in a short period of time? Or will this cut from Apple put them in a bad financial position?

What are your thoughts on this news regarding the Apple Inc. (NASDAQ:AAPL) iPhone? Are you worried about what this means for the company as a whole?

Check back here for more updates on iPhone Component Suppliers.

DISCLOSURE: I have no positions in any stock mentioned.

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