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Apple's iPhone 5 Dials Up Early Success (Update 1)

Stocks in this article: AAPL

Apple's iPhone 5 rollout is noteworthy given recent rumors of supply challenges for the phone's new in-cell technology, which integrates touch sensors into the LCD, effectively eliminating one layer of the phone.

"What you can infer from the comments is that they feel very comfortable with supply," said Marshall. "They would not have made these aggressive comments if they didn't feel good about the supply of these in-cell screens."

Whereas the display on prior iPhones consisted of three layers -- cover glass, a touchscreen substrate and the LCD display -- Apple has successfully collapsed the touchscreen substrate into the glass to make the phone lighter.

Wu, however, said there's some concern in the Apple supplier community about their ability to build enough in-cell screens. "It's because the demand is overwhelming, but it's a good problem to have," he said. "If you ask Research In Motion (RIMM) or Nokia (NOK), they would love to have that problem."

Wu, who expects Apple to sell a record 46.5 million iPhones in the December quarter, expects any in-cell supply issues to diminish early next year. The analyst had initially predicted December quarter sales of 45 million, a figure he raised to 46 million, before raising it again.

Craig Gentry, executive vice president and chief investment strategist of Apple investor Destination Wealth Management, told TheStreet that the level of interest in the iPhone 5 launch was unprecedented.

"Our thesis heading into this was that it's going to be the biggest consumer electronics launch in history," he said. "We got that reinforced."

"I think it's going to move the dial for Apple this quarter and it's going to be phenomenally successful for the next quarter," added Gentry, pointing to the recent trend of consumers delaying their iPhone purchases ahead of the new product.

Other Apple experts agree that the initial iPhone 5 landscape looks positive. In a note released on Monday, Canaccord Genuity analyst predicted iPhone 5 sales between 9 million and 10 million by Sept. 29, above his prior forecast of 6 million sales of the device.

Apple shares rose 0.8% to $696.63 on Monday.

--Written by James Rogers in New York.

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