Apple Inc. sold more than five million iPhone 5 smartphones in the three days since it hit stores, but shares sagged as the company struggled to meet demand.
While sales were solid, the company said Monday it had run out of its initial supply and many pre-orders were scheduled to go out in October.
Apple CEO Tim Cook said the company is "working hard to build enough iPhone 5s for everyone."
Expectations for new Apple products were so high - some analysts forecast Apple selling as many as 10 million phones over the weekend - that Wall Street was not wowed by the latest numbers. Apple shares fell $9.30, or 1.3 per cent, to close at $690.79 Monday. The shares hit an all-time high of $705.07 Friday as the phone went on sale in the U.S. and Canada and seven other countries.
Given the demand, Apple, the world's most valuable company, is being closely watched for any supplier problems that may slow down the smartphone production. "We believe that sales could have potentially been much higher if not for supply constraints," said William Power, an analyst with Baird Equity.
Supply limitations are likely to weigh on Apple as the iPhone 5 is launched in another 22 countries Friday.
To complicate matters, Apple's largest contract manufacturer, Foxconn Technology, closed a factory in the Chinese city of Taiyuan after a riot broke out among 2,000 employees.
Foxconn did not confirm which plants supply Apple, but an employee told Reuters the Taiyuan plant is among those that assemble and make parts for iPhone 5.
Apple referred questions to Foxconn. The California company also assembles its devices at factories run by Pegatron Corp.
On the parts side, Apple's key supplier for screens, Sharp Corp., has been struggling with high costs and scrambling to raise funds to pay debt. Sources said the company's output of new iPhone displays had fallen behind schedule.
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