Apple Inc, days after starting to accept preorders for its latest iPhone, is having trouble procuring enough touch screens to meet demand for the device, according to Ashok Kumar, an analyst at Rodman & Renshaw Inc.
The display production bottleneck has caused Apple to cut the number of iPhones it can ship each month, previously estimated at 4 million units, by about half, Kumar said in a research note today. The New York-based analyst cited checks of Apple’s component suppliers.
“Demand for the iPhone is chasing supply on a near-term basis,” Kumar said in an interview. Similar problems caused an initial slowdown in the production of Apple’s iPad, he said.
Apple logged more than 600,000 early orders for the iPhone 4 in a single day this week, a record, imposing a strain on computer systems and prompting carrier AT&T Inc to suspend sales of the device before its June 24 debut. In Japan, Softbank Corp suspended advance sales of the iPhone as demand threatened to exceed supply.
Apple is facing a “non-trivial risk” in the September quarter as demand for the older iPhone 3GS drops faster than the company can ramp up production on the iPhone 4, Kumar said. “If indeed they hit an air-pocket in September, Apple will catch up in December,” he said.
iPad delay
Analysts said Apple had a similar production delay related to its iPad tablet computer earlier this year. In April, the company delayed by a month the international debut of the iPad after shipping more than 500,000 of the devices in a week and underestimating how quickly they would sell in US. LG Display Co makes screens for the iPad and iPhone 4, Kumar said.
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“It seemed that LG had gotten these production problems behind it,” he said. “Now it appears that this is not the case.”
Apple spokesman Steve Dowling and Claire Ohm, a spokeswoman for LG Display, didn’t immediately return messages left outside of business hours. Apple, based in Cupertino, California, rose $2.20 to $274.07 at 4 pm New York time in Nasdaq Stock Market trading. The stock has gained 30 per cent this year.