According to the Wall Street Journal, Apple has cut orders for iPhone 5 components due to "weaker-than-expected demand" for the device.
Citing "people familiar with the situation", the Journal claims that Apple has cut its orders of iPhone 5 screens for the January-March quarter, for instance, by half. If the rumors are true, they suggest that the phone isn't selling as well as Apple anticipated-or, more unlikely, that its plans are changing.
While Apple has set the agenda for the smartphone market since it released its first iPhone in 2007, South Korea's Samsung, which sells many Android-based models at various price points, has already overtaken the U.S. company as the world's largest smartphone vendor by market share. Demand is also growing for inexpensive smartphones from Chinese makers such as Huawei Technologies Co.
In the 2012 third quarter, Apple held 14.6% of world-wide smartphone shipments, down from a peak of 23% in the fourth quarter of 2011 and the first quarter of 2012, according to IDC.
Samsung's share, meanwhile, rose to 31.3% in the third quarter of 2012, compared with 8.8% in the third quarter of 2010.
The Korean company said earlier this month that it expects to report another record operating profit for the fourth quarter of 2012, capping its best year ever amid strong sales of its Galaxy line of smartphones. The company expects an operating profit equivalent to between $8.1 billion and $8.5 billion for the three months ended in December.
Samsung Electronics reportedly has revised downward its purchases of parts and components for its latest flagship model, the Galaxy S4, for the second and third quarters of 2013 due to a slowdown in demand in the end market, according to industry sources.
ETNews confirmed once again that Samsung has issued order forecasts on the lower range for this quarter, 20-25 million instead of 25 million firm, and has lowered the forecast for next quarter from 30 million units down to 20 million.
But this does not mean that Samsung is losing its competitiveness in the smartphone segment, but rather indicates an underlying structural change in the industry, where demand for entry-level to midrange smartphones is rising sharply in China and other emerging markets, and the market for high-end models is becoming saturated, said the sources.