Sharp's Problems Could Spoil Apple's Holiday Season

Sharp, one of the leading suppliers of Apple AAPL devices, has run into some problems while trying to manufacture new displays for the upcoming iPhone 5. According to Reuters, Sharp has fallen behind on its production schedule of the new screen, which is said to be larger than the display featured in the iPhone 4S. This is not the first time that the iPhone 5 was reported to be in short supply. Up until this month, there were reports that suggested the highly anticipated device may be delayed. This was due to an anticipated chip shortage that would have prevented the iPhone 5 from meeting production demands. In addition to Sharp, LG Display was thought to be developing a revolutionary display for a future Apple product, but little is known about the company's progress. While the next-generation iPhone is still expected to ship in September, a recent report suggested that Apple may ship five million fewer units than anticipated. Under the best of circumstances, this could be difficult for Apple to manage. There could end up being a large number of consumers who walk away empty handed. A recent report by ChangeWave Research revealed that the iPhone 5 is in higher demand than any other iPhone released. In 2011, Apple faced a massive shortage when the iPad 2 became available. Many consumers lined up at Best Buy BBY, Target TGT, and other stores across the country, including Apple's own retail outlets, and still could not get one. The shortage lasted for more than four months. Apple was much more successful in meeting, (and in many cases exceeding), demand for the third-generation iPad. When it launched in the United States on March 16, there were more than enough tablets for everyone in line. Regardless, the new iPad has still become a huge seller, and the iPhone 5 is expected to be even bigger. If the aforementioned reports are any indication, this could prove to be Apple's most significant unit shortage yet. Follow me @LouisBedigianBZ