15 Jan 2013

Apple: iPhone Demand Goes Down

Shares in Apple fell after a newspaper report said orders were cut for spare parts due to unexpectedly weak demand for the iPhone 5.Apple's share price dropped in early pre-market trading by almost 4% to below $500 (£310) - a place the company was at around a year ago and well below the year-long peak of $705 (£430).Shares rallied slightly after the opening bell.The Wall Street Journal said two unnamed sources told it that Apple's first-quarter orders for iPhone 5 screens have dropped to about half of what the company had planned.

The report indicated one source also said the US-based firm had cut orders for other components, and that the order cut occurred last month.Apple did not immediately reply to requests for a comment.The move is seen by analysts as a sign that new iPhone sales have been worse than expected as demand wanes.Apple, the world's most valuable technology firm, has been facing increased competition from Samsung and other makers of smartphones that run Google's Android operating system.

South Korea's Samsung has already overtaken Apple as the world's largest smartphone vendor by market share, with some 50% greater unit movement.Android devices accounted for 75% of smartphone shipments during the three months ending in September, up from 58% at the same time in 2011, according to the research firm IDC.The iPhone's share stood at 15% in September, up from 14% in the previous year.

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 up to the end of last September.Apple has recently also had to weather criticism of the conditions of its workers at massive production facilities in China, which are operated by Taiwan's Foxconn.

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