You'll Have to Wait for the iPhone 5

Remember having to wait for the iPad 2? Well, prepare to wait again, Apple (Nasdaq: AAPL  ) fans. According to Taiwanese newspaper DigiTimes, touchscreen supplier Wintek has seen a defect in producing iPhone 5 touchscreens.

The report calls the defect a "delayed bubble" that appears only after production is complete and laminating begins. If true -- and that's a big "if" given DigiTimes' history -- Wintek, which is allegedly responsible for sourcing from 20% to 25% of Apple's iPhone touchscreens, could have trouble meeting its shipping deadlines.

Wintek, for its part, told the newspaper that all of its products were shipping on schedule. Whom to believe? I'm not sure it matters. Apple has enjoyed persistent buzz about the almost-mythical iPhone 5 for months. A Wintek flub would only add to the feeding frenzy by constricting supply, though probably not by as much as bearish investors would like to believe.

Yet there is a risk for Apple investors here. Google (Nasdaq: GOOG  ) is ramping up features in Android -- take the new Google Wallet, for example -- while working with Intel (Nasdaq: INTC  ) to devise new low-power, high-performance chip designs. iPhone alternatives are getting better by the day, and delays give time for on-the-fence buyers to reconsider their options.

How many would actually switch isn't really known, of course. A summer's worth of delays and rumors that the iPhone was heading to not just Sprint Nextel (NYSE: S  ) but also T-Mobile led Wall Street to believe that users would put off purchasing new handsets. Whoops.

The bigger risk may be to other suppliers, including OmniVision Technologies (Nasdaq: OVTI  ) , which supplies iPhone camera components, and Corning (NYSE: GLW  ) , whose Gorilla Glass makes iPhone touchscreens scratch-resistant. Fewer shipments would result in less volume, and if either is paid according to how much gear is sold through -- likely, since supply agreements tend to have volume provisions for returns and the like -- revenue could come in short.

But again, Apple prognosticators have long proved to be too pessimistic, and DigiTimes’ reporting has yet to be verified by a more credible source. Don't sell Apple on the basis of this rumor. Neither history nor the stock price justifies it.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep track of the hither and thither of Apple's iDrama by adding any of these stocks to your Foolish watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, and OmniVision Technologies at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple, Intel, and Google and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Apple, Corning, Intel, and Google, creating a diagonal call position in Intel, and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (11) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 26, 2011, at 10:09 PM, H3D wrote:

    Wintek have said there are no delays.

    But I guess ignoring that makes better headlines

    Now what's this I hear about Motley Fool being Bankrupt and their creditors and staff being F****d?

    Shame!

  • Report this Comment On September 26, 2011, at 10:14 PM, bsimpsen wrote:

    If you are going to publish rumors as equivalent to company statements, you could at least be prompt about it. This was widely reported days ago.

  • Report this Comment On September 26, 2011, at 10:59 PM, Oldfool103 wrote:

    I wasn't planning to sell just yet; but thanks for the advice.

  • Report this Comment On September 27, 2011, at 12:11 AM, xmmj wrote:

    This is about the most worthless article have ever seen.

  • Report this Comment On September 27, 2011, at 7:50 AM, TMFMileHigh wrote:

    @H3D,

    >>Wintek have said there are no delays. But I guess ignoring that makes better headlines

    Hmmm. From the article:

    "Wintek, for its part, told the newspaper that all of its products were shipping on schedule."

    Maybe read the whole article next time?

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On September 27, 2011, at 7:54 AM, TMFMileHigh wrote:

    @xmmj,

    Sorry, you'll have to be more specific. Or are you just using a comment as a Jedi mind trick? ("These aren't the risks you're looking for.")

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On September 27, 2011, at 7:58 AM, TMFMileHigh wrote:

    @bsimpsen,

    Thanks for writing.

    >>This was widely reported days ago.

    True. I would rather have finished this on Friday but last week's writing schedule was cut short by the Fool's Superior Investing Ideas conference:

    http://www.fool.com/investing/general/2011/09/22/live-blog-t...

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On September 27, 2011, at 1:06 PM, smartin619 wrote:

    After reading the entire article, I think the headline would have been better with a ? at the end.

  • Report this Comment On September 27, 2011, at 1:19 PM, joaquingrech wrote:

    @Tim i think you are wrong on this one, asking some reader to read the whole article. It pissed me off because your article brought us here with a false headline:

    "You'll Have to Wait for the iPhone 5"

    And then the article goes to say that nobody has announced anything official yet and nobody knows whether this is true or not.

    It's like me posting an article with title "Warren Buffett just died" that brings thousands of readers to it. And then talk about how people believed a rumor 10 years ago about it.

    Call it whatever, but I don't think many people like to feel like I've just felt on an article that it's on the main page of fool.com

  • Report this Comment On September 27, 2011, at 6:22 PM, HomerBrannon wrote:

    Yeah, sorry Tim, but that headline is misleading. Should have had a question mark. But it got us to read it so I guess it worked.

  • Report this Comment On September 27, 2011, at 9:50 PM, TMFMileHigh wrote:

    @joaquingrech and @HomerBrannon,

    Criticism noted. Thanks for the explanations and my sincere apologies for the unintended bait and switch. I'll work on this for next time.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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