iPhone 5

Japanese electronics manufacturer, Sharp Corporation (TYO:6753), has delayed the mass production of in-cell LCD panels for Apple Inc. (NASDAQ:AAPL)’s new iPhone because of manufacturing difficulties, sources told the Wall Street Journal. The situation may prompt Apple Inc. (NASDAQ:AAPL) to postpone the launch of its highly anticipated smartphone.

Sharp Corporation (TYO:6753) is one of the three firms that supply in-cell LCD panels for the upcoming iPhone. The other two – LG Display Co Ltd. (NYSE:LPL) and Japan Display, Inc. have already started supplying components. The president of Sharp Corporation (TYO:6753), Takashi Okuda, had announced on August 2 that the company would start mass production and shipping of the LCD panels from Kameyama plant by the end of August. Even after the delay, the company hasn’t specified the date when it would start shipping.

Sharp is believed to be struggling with high manufacturing costs of the screens. The company also has several debt repayment deadlines looming. Sharp is sitting on a hefty $15 billion debt pile, and is expected to suffer a net loss of $3.18 billion this year. The Taiwanese tech firm, Foxconn owns 9.9 percent stake in Sharp. Sharp’s present credit rating has been cut to junk status by Standard & Poor’s.

The new iPhone will be equipped with the breakthrough technology of in-cell LCD panels that could boost the battery life up to 40 percent. Reuters has reported earlier that the screen will extend 4 inches corner to corner. Earlier this year, Sharp had delayed the supply of screens for the latest iPad, but that didn’t cause any shortage of tablets in the market.

However, the stakes are really high this time around. After losing the patent case in a California court, Samsung Electronics Co., Ltd. (KRX:005930) released a number of new smartphones and tablets on Thursday. The two companies are competing fiercely to gain an edge over each other. Nokia Corporation (NYSE:NOK) is also gearing up for the competition in the smartphone market.

Apple Inc. (NASDAQ:AAPL) is expected to unveil the new iPhone in September, possibly on Sept. 12. However, the company hasn’t officially announced the event.