Apple's shine is fading when it comes to iPhones.
The tech giant has slashed orders for iPhone 5 parts after weaker-than-expected demand and growing popularity of Android products, according to a new report.
Citing sources familiar with the situation, the Wall Street Journal reported Monday that first quarter orders for iPhone 5 screens were roughly half of what Apple previously planned to order.
Orders for components other than screens were also cut.
Apple’s stock price dropped $17.45 or 3.4 percent to $502.85 in premarket trading Monday and the news comes as the company has been facing increased competition from Samsung and other makers of smartphones that run Google’s Android operating system.
Reuters
An Apple iPhone 5 is displayed in an Apple store.
The iPhone has dominated the smartphone market after its much-anticipated release in 2007. But South Korea's Samsung, which sells Android-based models at various price points, has already overtaken the US company as the world's largest smartphone vendor by market share.
Google says more than 500 million Android devices have been activated since the software's release four years ago. By comparison, Apple had sold about 271 million iPhones through last September.
Some analysts suggest Apple may have made large orders in the October-December quarter due to fears of manufacturing difficulties. But Citigroup, which lowered its rating for Apple to Neutral from Buy, said “good not great” demand is likely behind the order cuts.
Previous reports suggest Apple may make a cheaper iPhone to wrestle market share back from Samsung.
Apple has not responded to requests for comment this morning.
Information from the Associated Press was used in this report
Apple slashes iPhone 5 part orders after weak demand: report
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