Apple taking cautious approach with iPhone X production before preorders begin - report

AppleInsider

With preorders for the iPhone X not set to start for over a month, Apple is said to be employing a conservative approach with production of its flagship handset, as suppliers are reportedly turning out parts at a pace slower than anticipated.

Citing its usual Taiwan-based supply chain sources, DigiTimes reported on Monday that suppliers are currently shipping parts and components to Apple at about 40 percent of the quantities originally anticipated. Despite that, some suppliers are said to still be facing issues with yield rates.

While DigiTimes has a mixed track record in predicting Apple's future product plans, it does have sources within Apple's vast supply chain who offer insight on production.

The report comes as KGI Securities analyst Ming-Chi Kuo separately reported that suppliers are expected to begin iPhone X production in earnest in the latter half of October, ahead of the product's launch on Nov. 3. Still, Kuo doesn't believe that suppliers will be able to catch up with demand until some point in the first half of 2018, largely held back by the new Face ID capable TrueDepth camera system.

DigiTimes's sources claim that "Apple is waiting to see the pre-sale orders of the iPhone X as well as the sales performance of the iPhone and iPhone 8 Plus" before it begins production of the iPhone X in earnest. The company was said to have employed the same tactic with the iPhone 7 in 2016.

The iPhone X represents the first major redesign of the iPhone since Apple debuted the iPhone 6 and iPhone 6 Plus in 2014. It features an edge-to-edge OLED display that ditches the iconic home button for a new swipe-up gesture.

Beyond the TrueDepth camera, the OLED screen is also believed to be a potential bottleneck for the iPhone X, marking the first time Apple has opted to ditch LCD for its handset. Rumors suggest that rival Samsung is the sole OLED supplier for the iPhone X, and that the display alone could cost Apple between $120 and $130 per unit.

macpro

This is going to be like checking into Southwest Airlines 24 hours ahead of a flight hoping to get a seat with your wife!  I wonder what time the 'lines' open to preorder, I'll be waiting ready to press the button at 12 midnight the day before if required

avon b7

Better safe than sorry. A cautious approach makes good sense. If they hit some kind of production issue (component availability, manufacturing issues etc) they can always push back availability in certain countries and when any problems are ironed out continue with the roll out. Users could then opt for the 8 series or opt to wait.

ksec

If Apple now know the final OLED production wont be able to fullfil their demand, they will have to reduce their order from other component supplier.

It could also be iPhone 8 isn't doing as well as they are expected. No queue in South Korea, Japan, China, Hong Kong. etc.

franklinjackcon

Using "in earnest" twice in a short article seems wrong

schlack

No way are they throttling production to be cautious...apple understands this phone will be supply constrained for quite awhile...probably just positive spin on any production issues if they exist.

blurpbleepbloop

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

tshapi

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

strangedays

tshapi said:

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

Complete BS. That may (may) be viable by a small company struggling to make a name for itself, but not when you’re already the most successful company on earth. Apple can and will sell every single X they produce, so intentionally not selling them means lost sales, lost profit, with absolutely no benefit. Apple makes its record profit by selling devices, not not-selling them. 

icoco3

ksec said:

... 

It could also be iPhone 8 isn't doing as well as they are expected. No queue in South Korea, Japan, China, Hong Kong. etc.

Could also be that a lot of people are holding off for the X.  We won’t know until preorders start. Spoke with my local ATT store manager and Saturday evening they had 8’s in stock.  He said it was slower than normal.  I think there are many who want a big leap and the 8 wasn’t enough to push them to upgrade but the X is so they are holding out a bit longer.

kevin kee

tshapi said:

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

Funny they didn't do it for 8?

blurpbleepbloop

StrangeDays said:

tshapi said:

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

Complete BS. That may (may) be viable by a small company struggling to make a name for itself, but not when you’re already the most successful company on earth. Apple can and will sell every single X they produce, so intentionally not selling them means lost sales, lost profit, with absolutely no benefit. Apple makes its record profit by selling devices, not not-selling them. 

I think you missed the message, SD.  Scarcity marketing is not scarcity selling.  The notion is that with every product launch there is always the message that there won’t be enough to go around and ya better get your order in at midnight or you’ll lose out.  Putting aside Apple’s 40-ish years in the PC biz, after 10 years of phenomenal growth of their mobile platform, with the ability to dictate terms to their supply chain, do you have any doubt that Apple will be able to produce exactly the number of devices it wants for any given launch?  No one is saying they would intentionally torpedo their own sales in the name of producing scarcity (though for much, much lower volume sales, that’s a viable tactic).  But they will give every impression that if you don’t act quickly, you’re gonna miss out.

bestkeptsecret

Personally I hope everyone who wants an iPhone X gets one as soon as possible. I'm sure even Apple hopes for that. The reality is of course different.

But my iPhone 7 Plus is so amazing that I don't mind waiting a couple of months to get the iPhone X, if it is delayed.

And when the iPhone XS is delayed next year, I won't mind waiting again since the iPhone X would probably be even more amazing!

Of course that won't prevent me from jumping onto the pre-order list the moment pre-orders open for it!

jfc1138

ksec said:

If Apple now know the final OLED production wont be able to fullfil their demand, they will have to reduce their order from other component supplier.

It could also be iPhone 8 isn't doing as well as they are expected. No queue in South Korea, Japan, China, Hong Kong. etc.

Queues are outdated given the ease of online ordering. 

flaneur

blurpbleepbloop said:

StrangeDays said:

tshapi said:

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

Complete BS. That may (may) be viable by a small company struggling to make a name for itself, but not when you’re already the most successful company on earth. Apple can and will sell every single X they produce, so intentionally not selling them means lost sales, lost profit, with absolutely no benefit. Apple makes its record profit by selling devices, not not-selling them. 

I think you missed the message, SD.  Scarcity marketing is not scarcity selling.  The notion is that with every product launch there is always the message that there won’t be enough to go around and ya better get your order in at midnight or you’ll lose out.  Putting aside Apple’s 40-ish years in the PC biz, after 10 years of phenomenal growth of their mobile platform, with the ability to dictate terms to their supply chain, do you have any doubt that Apple will be able to produce exactly the number of devices it wants for any given launch?  No one is saying they would intentionally torpedo their own sales in the name of producing scarcity (though for much, much lower volume sales, that’s a viable tactic).  But they will give every impression that if you don’t act quickly, you’re gonna miss out.

And I think you miss the entire point of Apple's supply chain strategy, which has always been focused on edge technologies and dependent on the uncertain abilities of their contractors to get their innovations into full-scale production.

There are numerous examples of phone launches hampered by very real shortages of this or that component. Apple doesn't have time — or the deviousness in their business strategy — to play the bullshit games that you are imagining. 

edited September 2017

tshapi

kevin kee said:

tshapi said:

blurpbleepbloop said:

What drives interest in a product like the X better than the perception of scarcity.  If Apple isn’t marketing this idea in advance of the start of pre-sales they aren’t doing their jobs. BUT, it’s Apple, so they are doing their job.

IMO scarcity marketing is there mojo 

Funny they didn't do it for 8?

IMO the x is the phone they want you to buy,  think about it, when all the rumors were churning we heard few rumors about the 8/8+ most of the rumors were about the X because this is the phone That Apple really wants everyone to upgrade to,