Next iPhone Likely To Be Delayed Due To Production Hiccups

An analyst at KGI Securities, Ming-Chi Kuo, has revealed that there will be delays in the production of the next iPhone. Instead of the traditional mass manufacturing period occurring in the months of August to September, the volume production of the OLED iPhone is likely to be delayed by a few months.

“… production ramp up of OLED iPhone could be delayed to as late as October-November compared to the usual ramp up period of August-September, due to increased production difficulty,” the report from KGI Securities reads.

September launch

However, the iPhone will still be launched in September. But because mass production will have been delayed, there will be severe supply shortages that will be experienced. Some of the reasons contributing to this include the fact that there a couple of major components that have been custom-ordered by Apple and which are made specifically for the iPhone.

Some of the components that are causing a delay in the start of the mass manufacturing include 3D sensing cameras, 3D Touch Module, a customer Apple chipset branded A11 10-nanometer and an OLED display. It is understood that one of the most problematic components has been the Touch ID since the full-screen display of the iPhone 8 will mean there will be no home button and so finding a location for it has been a challenge.

Lower 2017 sales

According to Kuo the delay will impact Apple 2017 revenues negatively. This is because with a delay, it will mean that the next iPhone will have been in the market for a period of only about two months. KGI Securities has consequently revised its estimates on the sales of the next series of iPhones including the iPhone 8, iPhone 7S Plus, and iPhone 7S downwards. While about 110 million units were collectively sold in 2016’s second half, the figure will reduce to between 80 million units and 90 million units this year.

In the long run, however, iPhone 8’s demand will not be undermined by the delay in mass production and the supply shortage that will subsequently result. While 2017 sales will not be high, the demand for the device will increase in 2018 once production and supply has stabilized.

Low demand

With regards to iPhone 7S, Kuo is pessimistic since the updates will be incremental and without a change in the design of the chassis. This is because full-screen smartphones based on Android from manufacturers such as Xiaomi, Huawei and Samsung will have been made available and will therefore make the iPhone 7S Plus and the iPhone 7S seem less appealing.

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