Due to a decrease in demand, Apple has reportedly cut orders for screens and other parts associated with the iPhone 5.
The report suggests that the company is having a hard time finding a foothold in Asian markets thanks to the number of rivals that are currently vying for attention. According to Reuters, shares fell four percent before the bell on Monday as a result of the news.
Sources close to the situation have stated that Apple asked Japan Display, Sharp, and LG Display to essentially halve the amount of screens they are producing for the iPhone 5. Analysts believe the decision to cut back on component orders means the smartphone isn’t selling nearly as well as Apple had hoped.
The Wall Street Journal explains that Citigroup lowered the company’s status from “Buy” to “Neutral” last month after learning about the iPhone orders situation. Sources have stated that Apple is currently sitting on a large inventory of unsold devices. This may be the reason why the company is cutting back on the number of phones manufactured at the beginning of the new year.
The website also states that the cuts made to component orders may hurt some of the companies involved with the phone’s production. Sharp is reportedly struggling after experiencing financial losses from its television department.
Forbes points out that one of the reasons Apple is experiencing a drop in demand for its iconic smartphone is because people have started flocking to company’s competitors. Sources indicate that demand has increased quite a bit for Samsung and Android phones. Some believe people are more attracted to the devices’ bigger screens.
Apple has yet to comment on the cuts made to its orders. Sharp and other companies that supply components for the iPhone 5 have also refused to comment on the rumors as of this writing.