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According to a story on Bloomberg today, the supply problems that Apple is currently experiencing with the iPhone 5 have mainly been caused by the thinner touch-screen display. The iPhone 5 is the first Apple phone to use in-cell technology for the display, which enables the phone to be thinner because it combines display and touch sensor in one single part. At present, Apple is believed to be sourcing the in-cell displays from LG Display and Japan Display, and its thought that the problems with supplying Apple with enough screens to meet demand has to do with how intricate the screens are to make, much more so than previous screens. I can remember that this was talked about by analysts months ago, but it seems that even being aware of the potential problem well in advance, and taking on Sharp as an extra supplier, has not helped matters, with Bloomberg saying that Sharp's contribution to the supply pool has been hampered by defective screens that it struggled to put right prior to the iPhone 5s release last week.
Source: Apple IPhone 5