Apple 'halves iPhone 5 screen orders'

Apple has asked Sharp, LG and Japan Display to cut supply of LCD panels down from an initial planned order to about 65 million units for this quarter, Japanese daily Nikkei reported.

Japan Display's plant in Nomi, where the iPhone maker has invested heavily, is expected to temporarily reduce output by up to 80 per cent compared to the October to December period, Nikkei said.

Sharp's dedicated facility for iPhone 5 LCD panels in Japan's Mie Prefecture will lower production in January and February by about 40 percent from the October to December quarter, when it was near full capacity, the daily said.

The Wall Street Journal reported that Apple had also cut orders for other components, citing "people familiar with the situation".

The reports come with Apple facing increasing pressure in the smartphone market from Samsung. The South Korean giant increased its share of the smartphone market to 31.3 per cent in the third quarter of last year, according to analysts IDC, more than double Apple's 14.6 per cent share.

Samsung said today that global sales of its flagship Galaxy S smartphones had topped 100 million since the first model was launched in May 2010. The Galaxy S3, launched last May, sold more than 40 million in seven months. The new Galaxy S IV is widely expected to be released within months, and may have an unbreakable screen, full high-definition quality resolution boasting 440 pixels per inch, and a more powerful processor.

Samsung has overtaken Apple, helped in part by the popularity of its Galaxy Note II phone-cum-tablet, reinforcing the benefits of offering a wider range of handheld devices at most price points, while Apple rolled out just a single new smartphone last year globally, analysts have said.

Samsung is expected to increase its smartphone sales by more than a third this year, and widen its lead over Apple, according to researcher Strategy Analytics, which has forecast Samsung will sell 290 million smartphones in 2013 versus iPhone sales of 180 million. Kim Sung-in, an analyst at Kiwoom Securities in Seoul, sees Samsung shipping 320 million smartphones this year and doubling sales of its tablets to 32 million.

While analysts attribute the order cut to weak demand, some Apple watchers have suggested that the company is preparing another iPhone model for the first half of this year and is cutting iPhone 5 orders accordingly.

Last week it was reported that Apple was planning a 'cheaper' iPhone to better compete with smartphone's powered by Google's Android operating system. Phil Schiller, Apple's marketing chief, told a Chinese newspaper that "despite the popularity of cheap smartphones, this will never be the future of Apple’s products."