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A Supply Bottleneck Hurts iPhone 5 Sales

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All three screen suppliers report problems and delays.

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MINYANVILLE ORIGINAL Apple (NASDAQ:AAPL) reported yesterday that it sold five million iPhone 5s during its launch weekend. While this number broke records for the company, it still fell short of the most analysts' estimates, which ranged between six million and 10 million phones. Many analysts speculate that Apple's supply constraints contributed significantly to the miss in sales. Bloomberg confirmed this belief today, reporting that the iPhone 5's new in-cell screen technology has proved difficult to produce for Apple's supply partners.

LG Display (NYSE:LPL) and Japan Display both produce the screen, which combines the display and the touch censor into a single part. According to Barclays, Apple also hired Sharp (PINK:SHCAY), Japan's largest maker of liquid-crystal displays, to expand its list of suppliers and meet demand for the phone. However, all three have struggled to produce the screens. Sharp has encountered the most difficulty and failed to produce screens before the phone's launch. It had troubling reducing the defects in screens that use the touchscreen technology.

Smarthouse.com highlighted the lack of supply, reporting that those who damage their screens will have to wait until Christmas for a new one or pay $220 for another screen due to the limited supply. Ben Reitzes of Barclays stated that 10 million units of in-cell panels will have been produced by the end of the third quarter of this calendar year.
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