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.
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