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iPhone 5's initial ramp too big to sustain, says DisplaySearch

The iPhone 5's initial shipment rate was too large to maintain, resulting in cutbacks, DisplaySearch says. But the cutbacks don't necessarily equal a drop in popularity.


Market research firm DisplaySearch said the reduction in shipments of displays for the iPhone 5 -- which reflect shipments of the phone itself -- is real but that it doesn't necessarily mean the device's popularity is suffering.

"We started hearing indications of cutbacks before the new year," Paul Semenza, senior vice president, analyst services, at DisplaySearch, told CNET today.

That said, he doesn't exactly have a negative take on demand for the iPhone 5.

"It was a very quick ramp up. The Q4 [estimate] was originally about 61 million displays [for the iPhone 5]...that may be dialed back, but anything near that number is still huge," he said.

"That would support the theory that the ramp was too much to sustain."

By comparison, shipments of the iPhone 4S in the first quarter of sales were far below that number.

Looking to the first quarter of 2013, DisplaySearch's original estimate of 57 million has now been reduced to a range of 33 million to 42 million.

Some analysts said improvement in yields -- the number of good components that are produced versus bad -- have been involved in the shipment drop. But Semenza said such a view was problematic. "That's not logical. If the number of orders are cut, that really has nothing to do with yields," he said.