Apple Inc.(NASDAQ:AAPL) faces supply shortage due to screens, Shares Retreat

Apple Inc.(NASDAQ:AAPL)’s component supply woes - hinted at earlier before the launch of its iPhone 5 - are now coming back to haunt the company.

The shortage of the new iPhones is not due to excess demand, but due to a shortage of component, more particularly the LCD screens.

In the iPhone 5, the display screen is an integrated touch panel, which has been found difficult to replace compared to the screens on its earlier models.

Apple has been working with vendors such as Sharp and LG to make the screens. However, according to reports Sharp has been having problems shipping the screens to the Cupertino company on time, due to its own production issues.

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Apple itself has said that it may not be able to meet the demand for the phones, orders for which have already been placed with it, until October.

The new screens are also harder to produce as the resolution has been enhanced to produce a `retina-like' display quality while a new technology has also reduced the glare of the screen especially when seen in the sunlight or under bright lights.

Macquarie Securities has cut its estimates of the iPhone sales to 3.2 million for the September quarter from 4 million earlier.

With the holiday season just around the corner, analysts said that the company now has to start thinking ahead as this is the time when consumers make most of their purchases.

Shares in the company fell 2.5 percent on Tuesday to $673.54 as reports about the supply shortage were being circulated. On Monday, the stock was down about 1.50% reporting their first weekend sales of iPhone 5.