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Apple Sours

The stock peaked at roughly $705 in September

Apple has cut component orders for the four-month-old iPhone 5 because of weaker-than-expected demand, the Wall Street Journal said Monday citing "people familiar with the situation."

It's unclear if Apple initially over-ordered out of concern for potential shortages or if it is moving to introduce new phones more frequently.

The company reportedly informed suppliers of the cuts last month according to Wall Street analysts, many of whom called it "old news."

The Journal's story, which followed the Nikkei saying the same thing, briefly sent the "world's most valuable stock" skittering below $500 before it staged a tiny comeback to around $504, down around 17 bucks.

The stock peaked at roughly $705 in September.

The Nikkei said that Apple's Q1 orders for the four-inch screens for the iPhone 5 from Japan Display, Sharp and South Korea's LG Display were sliced to half. Reportedly Apple originally wanted ~65 million screens. Other components such as memory chips, which it buys from Samsung, are also supposed to be affected but Apple is also trying to limit the amount of parts it buys from its main rival.

Samsung, meanwhile, is bragging about selling 100 million of its Android-based Galaxy S smartphones since the series was first introduced in May of 2010. The Galaxy S3, out last May, sold more than 40 million units in seven months with average daily sales of about 190,000 units. Apple claims Samsung is using stolen Apple technology.

Apple is supposedly going to begin trying to blunt the market inroads made by Samsung's variegated product mix by introducing a cheaper iPhone later this year to help win back share in emerging markets where the classic iPhone is too expensive. The West is supposedly at saturation.

Reuters hears that the new Galaxy S IV could be out in months, perhaps with an unbreakable screen, full high-definition quality resolution of 440 pixels an inch and a more powerful processor.

Chinese rivals such as Huawei and ZTE are also nibbling away at demand.

Apple's global market share peaked at 23% in 4Q11 and 1Q12, dropping to 14.6% in 3Q12, while Samsung's share rose to 31.3%, up from 8.8% in 3Q10.

The iPhone is Apple's key product.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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