Production ramp of 'iPhone 8' could be delayed to November, cause supply constraints

Posted:
in iPhone edited May 2017
Production difficulties might force Apple to push back full manufacturing of the widely rumored "iPhone 8" into October or November, severely impacting overall iPhone shipment estimates for the second half of 2017, according to KGI analyst Ming-Chi Kuo.




In a note to investors on Tuesday, Kuo said industry checks show signs of a "worst case scenario" for iPhone shipments, with production of the hotly anticipated "iPhone 8" potentially delayed by two or three months.

Apple usually ramps production of its iPhone product in August or September to prepare for high demand during the annual fall launch cycle, which traditionally takes place in mid-September. This year, the company is believed to announce an OLED-equipped iPhone variant alongside iPhone 7 series updates, though production ramp of the high-end model could be pushed back to as late as October or November.

"In other words, severe supply shortages may persist for a while after the new models are launched, capping total shipments of new iPhones in 2H17F," Kuo says.

The analyst does not specify what issues stand in the way of production, but a report last month claimed partner supplier Samsung hit a snag in manufacturing OLED panels bound for the handset. Like Kuo's current assessment, the prior report cited a one- to two-month delay in Samsung's production of OLED hardware for Apple.

Separately, rumors from Apple's supply chain suggest the company is having difficulty integrating its Touch ID fingerprint sensor into the handset's display. Some industry watchers, including Kuo, expect Apple to utilize a below-screen Touch ID solution with "iPhone 8," allowing for the deletion of iPhone's home button in favor of a full-face screen with so-called "function area."

Supply constraints are nothing new for Apple. When the iPhone 7 launched last year, the company experienced unusually high sales of the dual-camera iPhone 7 Plus model. CEO Tim Cook in an investor conference call discussing the second fiscal quarter of 2017 said Apple was unprepared for the shift in demand, which led to supply constraints and lower overall sales.

A more apt comparison may be AirPods, which debuted at the iPhone 7 event in September ahead of planned retail sales in October. Apple missed its announced launch window due to unforeseen delays that pushed back availability to December. Six months later, AirPods are still sold out, with orders placed today estimated to arrive in six weeks.

An "iPhone 8" delay, however, would come with consequences to Apple's bottom line, as analysts expect the device to drive an iPhone "supercycle" later this year. Buffering for the potential downside, Kuo says iPhone shipments could hit 80 million to 90 million units in the second half. That figure is down from the analyst's previous estimate of 100 million to 110 million units, which itself is more conservative than consensus of 100 million to 120 million units.

Apple's "iPhone 8" is predicted to boast an all-new "glass sandwich" design featuring an edge-to-edge OLED, custom 3D sensing cameras, wireless charging and more. Packed with new technology, the flagship device is expected to come with a premium price of more than $1,000.
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Comments

  • Reply 1 of 21
    calicali Posts: 3,495member
    Beautiful render but what's that icon on the bottom left supposed to be? TouchID? Why?


    watto_cobra
  • Reply 2 of 21
    lkrupplkrupp Posts: 7,162member
    Okay, this will be my very last post on these stupid supply chain rumors. Maybe if we all start ignoring them AI will stop publishing them.
  • Reply 4 of 21
    macseekermacseeker Posts: 439member
    mobius said:
    I wonder if AppleInsider is becoming a Dr. Jeckyll/Mr. Hyde character.

    Or maybe AppleInsider covering their bases.
    mwhite
  • Reply 5 of 21
    karmadavekarmadave Posts: 315member
    When was a major release of an iPhone NOT under supply constraints? Demand for the next generation iPhone will likely be huge so expect that there will be delays throughout the October and November. Firm grasp on the obvious...
    rich gregorypscooter63StrangeDayswatto_cobra
  • Reply 6 of 21
    wonkothesanewonkothesane Posts: 1,372member
    This is getting ridiculous. 
    On second thought, delete "getting". 
    watto_cobra
  • Reply 7 of 21
    Mike WuertheleMike Wuerthele Posts: 4,636administrator
    macseeker said:
    mobius said:
    I wonder if AppleInsider is becoming a Dr. Jeckyll/Mr. Hyde character.

    Or maybe AppleInsider covering their bases.
    It's got more to do with reports from different sources, saying different things. Personally, I think this report here is inaccurate.
    macseekerpscooter63SpamSandwichwatto_cobra
  • Reply 8 of 21
    calicali Posts: 3,495member
    lkrupp said:
    Okay, this will be my very last post on these stupid supply chain rumors. Maybe if we all start ignoring them AI will stop publishing them.
    I don't think any of these rumors are true. Next gen iPhone supply rumors started in April.... APRIL. The damn iPhone won't be in production until at least September. So how the f***?
  • Reply 9 of 21
    sflocalsflocal Posts: 4,652member
    The ONLY reason it IS going to be delayed has less to do with supply chain issues and more to do with the gazillion people that will all order it at once at introduction so that no amount of inventory at introduction will be able to supply it all.

    Jeez, this is another rinse-repeat article stating the obvious.
    macpluspluskarmadavepscooter63StrangeDays
  • Reply 10 of 21
    mattinozmattinoz Posts: 1,100member
    All this talk of TouchIDBar makes me wonder if slide to unlock will return.

    TouchID sensor can then be on the right edge instead of over the Lightning socket (for thinness reasons). Touch and slide any of the Bar Icons right and your finger will travel over the sensor and unlock. Less accidental unlocks with two movements. Sliding right can still bring up the camera and unlock at the same time.
    I think what the mocks keep missing is that the Touch bar will be a second screen not part of the main screen.
    watto_cobra
  • Reply 11 of 21
    jbellajbella Posts: 29member
    I get the feeling that these stories are put out to play with Apple stock prices. Someone is making a fortune on this stuff.
    mattinozwatto_cobra
  • Reply 12 of 21
    cali said:
    Beautiful render but what's that icon on the bottom left supposed to be? TouchID? Why?


    This would make sense if the implementation is similar on oled iPhone to oled TouchBar; where the TouchID element exists in a fixed spot, & the rest of the strip is dynamic icons.
    watto_cobra
  • Reply 13 of 21
    MikeymikeMikeymike Posts: 102member
    cali said:
    Beautiful render but what's that icon on the bottom left supposed to be? TouchID? Why?


    This would make sense if the implementation is similar on oled iPhone to oled TouchBar; where the TouchID element exists in a fixed spot, & the rest of the strip is dynamic icons.
    To me, that rendering suggests a 'non-fixed' element, moveable in the same way App touch icons are. Which would be great. (and even if movement was only limited to within the dock).
    watto_cobra
  • Reply 14 of 21
    karmadave said:
    When was a major release of an iPhone NOT under supply constraints? Demand for the next generation iPhone will likely be huge so expect that there will be delays throughout the October and November. Firm grasp on the obvious...
    You won't see these sort of crap articles for Tesla and the pre-ordered Tesla 3s. It's obvious enough Tesla can't turn out as many cars fast enough as there are pre-ordered vehicles (it will far exceed plant production rate), but it's not going to be mentioned so it doesn't hurt the stock. The anti-Apple factions are SOBs by always trying to state the obvious as some huge problem.
    watto_cobradaren_mitchell
  • Reply 15 of 21
    fallenjtfallenjt Posts: 3,976member
    This post happens every fucking year! Pssss
    watto_cobra
  • Reply 16 of 21
    dsddsd Posts: 184member
    Nobody is buying iPhones anymore because they're selling too many.
    edited May 2017 tycho_macusermattinozwatto_cobra
  • Reply 17 of 21
    StrangeDaysStrangeDays Posts: 7,994member
    cali said:
    Beautiful render but what's that icon on the bottom left supposed to be? TouchID? Why?


    This would make sense if the implementation is similar on oled iPhone to oled TouchBar; where the TouchID element exists in a fixed spot, & the rest of the strip is dynamic icons.
    Except that Apple has shown us they are very much into symmetry. I have a hard time believing they'd stick it way off in left field. 
    watto_cobra
  • Reply 18 of 21
    SpamSandwichSpamSandwich Posts: 31,191member
    Ming Chi is full of it.
    watto_cobra
  • Reply 19 of 21
    RTCRTC Posts: 14member
    karmadave said:
    When was a major release of an iPhone NOT under supply constraints? Demand for the next generation iPhone will likely be huge so expect that there will be delays throughout the October and November. Firm grasp on the obvious...
    Very well said. Apple doesn't need to deliver 70 Mio iPhone 8 immediately after they introduce it. They just need to announce it and offer it for ordering, even in very limited quantities. If Apple succeeds to offer a fresh design and some neat new features, analystsnwill "reward" Apple. I do not think it will be hard for Apple to beat the new S8 and S8+ (I have the latter as well, besides my daily companion iPhone 7 Plus) and while the hardware and new form factor are nice, there is nothing really outstanding to write home about. Also interesting: Although this is a completely new phone, it still runs on Android 7.0 and not the latest version. The iPhone 8 needs to be special, indeed, expectations are high but I think that Apple has it easy because the competition hasn't offered anything spectacular (yet).
  • Reply 20 of 21
    macseekermacseeker Posts: 439member
    macseeker said:
    mobius said:
    I wonder if AppleInsider is becoming a Dr. Jeckyll/Mr. Hyde character.

    Or maybe AppleInsider covering their bases.
    It's got more to do with reports from different sources, saying different things. Personally, I think this report here is inaccurate.
    I also understand that you have to give the Apple news, either it's bad or good.
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