Apple's display tech prompts iPhone 5 supply shortfall?

Apple relies on a couple of companies to produce iPhone 5 displays, and they're having trouble producing as many screens as the company needs.

iPhone 5 was in high demand over the weekend.
iPhone 5 was in high demand on Friday. Greg Sandoval/CNET

Apple might be suffering from an iPhone 5 supply shortfall, all because of its new display technology.

Apple relies primarily on LG Display and more recently on Sharp to produce the iPhone 5's screen, notes a Bloomberg report. However, Sharp has faced some trouble with defects and didn't start shipping screens until the smartphone's debut, a Barclays analyst stated, according to Bloomberg.

An IHS iSuppli analyst also told Bloomberg that "supply constraints" may have hampered the supply of iPhones its first weekend on store shelves.

Apple's iPhone 5 comes with in-cell touch sensing. Unlike the iPhone 4S, which came with a display and a separate touch screen, Apple's iPhone 5 combines the two layers. That has resulted in better color representation, but also presents new challenges for suppliers.

The display technology is also more expensive. According to an iSuppli teardown of the iPhone 5, the new display costs Apple $44 . The iPhone 4S display set Apple back $37.

"This is due to the iPhone 5's larger display -- at 4.0 inches diagonally, compared to 3.5 inches for the iPhone 4S -- and the inclusion of the new in-cell touch screen technology," according to iSuppli.

Despite concerns over supply, iPhone 5 sales reached 5 million units sold in its first weekend of availability . That's 1 million more sold than in the first weekend of the iPhone 4S last year.

Still, Wall Street had hoped for a better initial performance for the iPhone 5, with estimates reaching as high as 10 million units sold. One analyst said that 6 million units sold would be a "worst-case scenario."

CNET has contacted Apple for comment on the reported supply shortfall. We will update this story when we have more information.

Correction at 8:10 a.m. PT: The number of iPhone 4s units sold in its first weekend has been fixed.

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Apple iPhone 5

The Bottom Line: The iPhone 5 completely rebuilds the iPhone on a framework of new features and design, addressing its major previous shortcomings. It's absolutely the best iPhone to date, and it easily secures its place in the top tier of the smartphone universe. / Read full review

About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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