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U.S., European Economic Woes Threaten To Dampen iPhone 5 Sales

Two big stories this Summer have been on a collision course with another, and yet little has been said about it up until now. The audacious sales forecasts for the iPhone 5 and the conversely slumping global economy have remained strangely sequestered, with bold reports from financial and tech analysts that 35% of all U.S. consumers would come to own an iPhone 5, and that Apple had planned to order 25 million iPhone 5 units for production in order to meet astronomical demands in the last quarter of 2011.
A new report today, however, reveals that a global economy in crisis may have finally given Cupertino some pause in its own sales forecasts for the iPhone 5. The Christian Post reported today on a Digitimes article, saying “According to the tech website, handset solution suppliers have indicated that handset vendors such as Apple and HTC, have cut down their chipset orders for the fourth quarter. The companies are thought to be concerned over the tense global economy and have cut down orders to adjust accordingly, a Taiwan-based chipset-maker source has indicated. The site also claims that sources in the iPhone market revealed that Apple has scaled down its orders for handset parts to be shipped at the end of the third quarter.”



The iPhone 5 News Blog led the way on this new angle to the iPhone 5 sales forecasts. Back in late July, we ran a piece entitled “It’s the Economy, Stupid!” Will the Tanking U.S. Economy Affect the iPhone 5 Launch?” that considered the possibility that faltering U.S. consumer confidence could trump the fervent excitement over the iPhone 5′s impending release. Given the current economic conditions in the U.S., with unemployment over 9%, a weak consumer index, and a lowered U.S. credit rating that could make interest rates skyrocket, consumers may not be comfortable with investing in an iPhone 5, no matter how desperately they desire one. Even mobile carriers that bill the cost of a subsidized iPhone 5 onto their customers’ next mobile phone bill — a popular tactic used by many companies to get their subscribers to make a purchase — may find that fewer people are willing to fall for that sales tactic. Instead, mobile carriers may have to get creative in luring in U.S. consumers to make an iPhone 5 purchase, perhaps by deferring payment on the iPhone 5, or spreading it out over the course of several months. Economic conditions like these also make rumors of Apple offering a low-cost iPhone alternative more believable.

iPhone 5 devotees will say that Apple has nothing to worry — people will come up with the money to buy the new iPhone, no matter how bad the economy may get. But while tech enthusiasts may be willing to eat ramen noodles for a year in order to upgrade to the iPhone 5, the average out-of-work American consumer may pass on the new iPhone until the financial situation improves.