Apple may cut orders for the iPhone

Apple shares dropped in trading today at one point after The Wall Street Journal reported that the company has cut its orders for iPhone 5 components due to weaker-than-expected demand. Two insiders sent the tip to the Wall Street Journal. Apple has also cut orders for components other than screens.

Sales of the new iPhone haven’t been as strong as previously expected and demand may be waning. There is also stiff competition, primarily from Google’s Android based smartphones made by Samsung and others.

According to IDC, Android devices accounted for 75% of smartphone shipments during the three months ending in September, a jump of 17% from the same time in 2011. Meanwhile, in the same period, Apple’s iPhone had jumped just 1%.

Google claims it has activated more than 500 million Android devices since the release four years ago. Apple had sold about 271 million iPhones through last September since its inception.

Apple shares dropped about 3.4% on the news.

One issue with the iPhone, in addition to most Apple gadgets, is that the battery can’t be officially replaced. A heavy user who signs a 3 year contract may have to pay a penalty to get a new iPhone if the current iPhone dies before the contract is over. Can drop to a two year contract but will have to pay extra. In addition, generally the monthly fees for Apple users are also higher than for other smartphones as Apple takes a cut of the data fees.

Apple is getting less innovative. For example the Samsung Galaxy S III [the first phone to top the iPhone in sales since the iPhone’s initial release] had more features in it than the iPhone 5 which came out after – plus no waiting in long lines at midnight to get it.

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About ebraiter
computer guy

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