Apple's iPhone 5 Production Cut Not Because Of Sales Decline

By Shailesh Shrivastava email: | Jan 15, 2013 06:37 AM EST

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Apple's share prices witnessed a steep fall as rumors suggested that the Cupertino-based company has cut down the supply order for iPhone 5's components by almost 50 percent. The rumor was seen as a 'news' and the investors developed a cold feet suspecting the tech-giant's popularity decline.

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When the rumor was creating ripples across the tech and business world, at the same time, some of the analysts saw Apple's move as a quality building measure.

According to a report by Apple Insider, Mark Moskowitz of J.P. Morgan said that the reports of Apple facing are just "more noise" that will fuel an investor overreaction.

"In our view, the potential order cuts are a direct result of manufacturing yields improving following the fast-and-furious product roll-outs of the iPhone 5 as well as new iPads and Macs," Apple Insider quoted Moskowitz as saying.

"The bigger message related to any potential order cuts could be that iPhone 5 manufacturing yields and thereby gross margin are on the rebound," Moskowitz was quoted by Bloomberg.

At the same time, other analysts said that the production cut of the iPhone 5 is not new news, and they had already predicted this in December by cutting down the iPhone 5's sales estimate.

If we go by the figures available so far, Apple is in a good condition with a robust demand for iPhone 5. At the launch of the device it had double of the pre-orders iPhone 4S had on its launch day. The iPhone 5's pre-orders were above two million.

When the smartphone was launched in China in December 2012, the sale had touched a record 2 million figure in just three days. "Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," Tim Cook, Apple's CEO, had said in a press release. "China is a very important market for us and customers there cannot wait to get their hands on Apple products."

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