Apple Inc. (NASDAQ:AAPL)’s In-Cell Display Primary Reason Behind iPhone 5 Supply Shortage

Apple Inc.(NASDAQ:AAPL)’s adoption of in-cell touchscreen panels for its latest iPhone 5 seems to be the primary reason behind the constraints that the supplies of the new smartphone are experiencing.

Ben A. Reitzes, an analyst at Barclays stated in a note that constraints on in-cell touch displays have been the primary issue with iPhone 5 shipments. He mentioned that iPhone 5 display supply is expected to be just 10 million screens for the September quarter. A significant rise is estimated to start in the December quarter.

Reitzes said that it is still believed that Apple is experiencing crucial problem due to a move toward in-cell display technology that pushes a considerable amount of units into December and March quarters. This factor has restricted sales the past weekend as per checks performed by Barclays.

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When production of in-cell displays pick up pace in the fourth quarter, Reitzes thinks Apple will sell more than 45 million iPhones, resulting in 22% growth year over year.

The in-cell touch panels that are used in the iPhone 5 are supposedly manufactured by LG Display and Japan Display. Bloomberg contacted two of these companies and Apple but none of them were ready to comment on this.

Apple declared on Monday that sales of iPhone 5 went over 5 million in its initial 3 days of availability. That indicated a new record for the firm, although it fell short of expectations of Wall Street.

In a statement, Tim Cook, Apple’s Chief Executive has acknowledged that demand for iPhone 5 is overdoing the supply and the company is trying its best to catch up with the demand. Apple’s sales figures do not account for orders that are en route consumers, since Apple has to deliver an iPhone before it can be considered as a sale.

The latest iPhone is lighter and sleeker than iPhone 4S. Older versions of the iPhone depended on glass-on-glass solutions that were heavier and thicker. 

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