Apple to stockpile 2-3M iPhone X units prior to launch, component shortage eases in Novemb...

Posted:
in iPhone edited October 2017
Apple's iPhone X production woes are nearing an end, according to well-informed analyst Ming-Chi Kuo, who says shortages of key components like specialized handset circuit boards should resolved in November.




In a note to investors seen by AppleInsider, Kuo says Apple's assembly yield rate for iPhone X has stabilized, and he expects the company to stockpile between 2 to 3 million units in before the device ships on Nov. 3. While the initial number is exceedingly low, and will most assuredly not meet pent up demand, production should pick up soon after launch thanks to supplier diversification and the resolution of manufacturing issues.

Interestingly, Kuo sees flexible printed circuit boards as iPhone X's main bottleneck. This is in contrast to previous reports, including those from Kuo, claiming hardware associated with the TrueDepth camera system is largely to blame for low production numbers.

In particular, supply of antenna FPCBs is greatly impacting Apple's ability to build in mass quantities.

"Special materials, recipes, design, processes, equipments and tests are required for antenna FPCB, as the specifications for iPhone X antenna (supplied by Amphenol) are higher than those of iPhone 8 and only Murata and Career Tech can meet Apple's requirements," Kuo says. "Murata (originally with a 60% order allocation or higher) won't be able to resolve its issues before 2Q18, and thus has been fully replaced by second supplier Career."

Kuo believes Career will ramp up production in November.

The wide-angle camera module's FPCB is second on Kuo's list of most constrained iPhone X components. Unlike other dual-camera smartphones, Apple's iPhone relies on two separate PCBs, one to control the wide-angle lenser and another dedicated to telephoto hardware. Quality issues at Interflex, which is handling the wide-angle module FPCB that gets shipped to LG Innotek for integration, is believed to be the culprit in this case.

Finally, Apple is seeing issues with the 3D dot projector in its TrueDepth depth-sensing camera. The highly specialized part fires more than 30,000 points of light onto a user's face, which are then read by a receiving module and processed to create a subject depth map. This information is subsequently used to power iPhone X exclusive features like Face ID user authentication.

"We believe the previous design issues of the dot projector sometimes being unable to recognize human faces has been resolved after active alignments or environmental tests were addressed," Kuo says.

The dot projector is one piece of the so-called "Romeo" element, TrueDepth's transmission module that also includes a flood illuminator. "Romeo" pairs with the "Juliet" receiving module, made up of components like infrared and full-color HD cameras.

Kuo cut fourth quarter shipping estimates for iPhone X from 30 to 35 million units down to 25 to 30 million units. Shipments are expected to grow rapidly in the first quarter of 2018, up 50 percent on a sequential basis.

Comments

  • Reply 1 of 18
    See you guys 3am EST Friday morning.
    caliminicoffeeredgeminipaSoundJudgmentjSnivelySoliClarityToSeekingofsomewherehot
  • Reply 2 of 18
    focherfocher Posts: 640member
    I’ll let the rest of you fight for the remaining 1,999,998-2,999,998 after I take my two. 
    SoundJudgmentClarityToSee
  • Reply 3 of 18
    Great. I should easily be able to get one. ;)
  • Reply 4 of 18
    Remind me to bury myself in bed when ordering opens. And again when shipping starts.
    with all these reports of shortages the wailing from 1st second orderers when their new bit of bling arrives a few weeks late will be enough to send the Apple stock price down oh, 20%. :wink: 
    In the grand scheme of things it is not important.

    cynical? yes. As shakespear said, 'much ado about nothing'.

     
    gatorguypscooter63ClarityToSee
  • Reply 5 of 18
    Ooooh look how fast the number grew in the last few weeks  :|
    Maybe we'll make it to 10M for the launch weekend  :p
    redgeminipaClarityToSee
  • Reply 6 of 18
    mwhitemwhite Posts: 194member
    My daughter and her gf will have 4 laptops, 1 desktop, 1 iPad, 1 iPhone trying to get one. Good luck to her. And I'm paying for it haha......
    edited October 2017 ClarityToSee
  • Reply 7 of 18
    mike1mike1 Posts: 1,884member
    If the original rumors about the camera system were true and not they are mostly resolved, then of course the "bottleneck" would then be a different component. Unless Apple is at their desired production rate, whatever that may be, something or other will be a bottleneck.
  • Reply 8 of 18
    so basically he’s still throwing darts at a wall. it’s this component, no it’s that component...
    RonnnieOClarityToSee
  • Reply 9 of 18
    macxpressmacxpress Posts: 4,861member
    so basically he’s still throwing darts at a wall. it’s this component, no it’s that component...
    You know...we can all be analysts. Just throw all kinds of shit at the wall and one of them is bound to stick. Then we can always claim were right and news sites can claim were well connected and have a great track record. /s 
    MacProStrangeDayspscooter63mwhiteClarityToSee
  • Reply 10 of 18
    robjnrobjn Posts: 207member
    By the time information filters through to Kuo it might already be weeks old, if he thinks they have 2-3 million they probably actually have 4-5 million. Also the fact that he has changed his mind about which part is causing the bottleneck is indicative of the fact that he is not really very accurate and does not really know the whole picture. In effect, he has back-tracked on his earlier reports about the Romeo and Juliet components.

    He issued fearful, gloomy reports about iPhone 8 production problems right up until about a week before launch. They met demand, which of course was lower due to people waiting for iPhone X. The initial sales for iPhone X will also be lower than a normal cycle - but together 8 + X will be huge.
    edited October 2017 ClarityToSee
  • Reply 11 of 18
    Rayz2016Rayz2016 Posts: 4,591member
    So he was “well-connected”.

    And now he’s “well-informed”.

    Sounds like a demotion. What’s next?

    I’m rooting for “well-past-his-sell-by-date”. 
    edited October 2017 Solipscooter63ClarityToSee
  • Reply 12 of 18
    No longer well-connected!

    edited October 2017
  • Reply 13 of 18
    robjn said:
    By the time information filters through to Kuo it might already be weeks old, if he thinks they have 2-3 million they probably actually have 4-5 million. Also the fact that he has changed his mind about which part is causing the bottleneck is indicative of the fact that he is not really very accurate and does not really know the whole picture. In effect, he has back-tracked on his earlier reports about the Romeo and Juliet components.

    He issued fearful, gloomy reports about iPhone 8 production problems right up until about a week before launch. They met demand, which of course was lower due to people waiting for iPhone X. The initial sales for iPhone X will also be lower than a normal cycle - but together 8 + X will be huge.
    Kuo should receive the same attention as respect as DigiTimes.
  • Reply 14 of 18
    Are analyst just saying things so that no one forgets that they are still around or they just say anything for their own entertainment—wait and watch what people’s reaction? 

    That at would be hilarious if that’s the case, if not, then it’s just sad
  • Reply 15 of 18
    Ooooh look how fast the number grew in the last few weeks  :|
    Maybe we'll make it to 10M for the launch weekend  :p
    Anybody that believes Kuo's prognostications is a freaking idiot.

    At one time Kuo's 2017 iPhone X total sales were 50 million.  Yesterday he lowered that number (second such revision) downward to 25 million to 30 million.  In the US, from the time Apple commences shipping, there are 57 selling days remaining in the year.  Kuo's unit sales estimate presupposes a daily run rate of 438,000 iPhone Xs PER DAY, leaving Apple with virtually no inventory to begin FQ2/2018 (March quarter).

    Katy Huberty's last two research papers (both of which were extensive in their analysis) were excellent.  The latest research paper strongly indicates iPhone X will amount to 20% of TOTAL iPhones sold in the December quarter.  Kuo's 25 million estimate would then amount to TOTAL FQ1 unit sales of 125 million units!, and would yield YoY revenue growth of 48%.  Consensus YoY revenue is ~11%.

    Every year we get the same baseless (CHINESE) rumors that never pan out.  I don't believe the media would knowingly print a lie, so why they print Kuo's tripe is way beyond me.


  • Reply 16 of 18
    k2kwk2kw Posts: 1,725member
    Has this 3D dot projector been tested by the FDA as safe?   Otherwise I see a class action lawsuit in the future by victims of second hand projections.   Where's the ambulance chasers?
  • Reply 17 of 18
    k2kw said:
    Has this 3D dot projector been tested by the FDA as safe?   Otherwise I see a class action lawsuit in the future by victims of second hand projections.   Where's the ambulance chasers?
    No, Apple doesn’t consider user safety when designing brand new products and welcomes massive lawsuits. They put arsenic in the glass, too. Poor Apple.

    Nice FUD sandwich. 
  • Reply 18 of 18
    I find it strange that many other companies don't have the same problems that Apple has in terms of meeting demand. Maybe Apple is the only company people write articles about. I don't recall any other product recently (except for Tesla 3 vehicles) that they're always criticizing about delays. Why are people so concerned if iPhone production is delayed? So what if they get it a bit later than usual? How is a delayed smartphone that critical to anyone?

    Any one component can become a bottleneck as it takes all components to make a complete product. It's possible that one month it could be a particular component holding up assembling, then next month it's possible it could be another component if yields are low for several components. I just don't see why these problems are always pointed out concerning only Apple as though Apple is the only company with component yield problems.
    edited October 2017
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