Things don’t look positive for Apple according to reports out of Asia this morning. First, sources close to the Wall Street Journal suggested that Apple had asked its part suppliers to cut their output due to weak sales forecasts. Now, there’s more color from a report from Japan’s Nikkei which claims its LCD partners are reducing their output by “almost half” in response to lower orders from Apple.
The news wire reports — via Reuters — that Apple’s initial order of 65 million units for the previous quarter is being slashed heavily. Sources say Japan Display set to ‘temporarily’ reduce its output by 70-80 percent, while Sharp’s production will be down by around 40 percent from its October-December level.
Both the Wall Street Journal and Nikkei suggest that Apple is making the move in response to weaker than expected demand for the upcoming first calendar quarter of 2013.
The news, if true, is not good for component makers who face the issue of reduced sales since they have specialized their production for Apple devices and would struggle to sell those component to other companies. Sharp, in particular, struggled financially during 2012, despite securing key loans and striking an investment deal with Qualcomm, and could face further issues were this to happen.
Apple reports its financial figures this month and we can expect to hear its latest sales figures for the end of 2012. With Samsung widely expected to unveil the successor to the Galaxy S3 in the coming months, the iPhone 5 is likely to get more competition for consumers’ attention very soon.
Apple’s final quarter of 2012 was boosted by the launch of the iPhone 5 in December. The company subsequently revealed it had sold a record 2 million units over the opening weekend.
Headline image via Jonathan Nickstrand / Getty Images