Apple Leasing Equipment to Suppliers to Make Sure Key iPhone 8 Components Get Made

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Apple recently purchased expensive production equipment to produce the rigid flexible printed circuit board for the iPhone 8, reports The Korea Herald. Apple doesn't plan to use the equipment itself, but is instead leasing it to suppliers to ensure it can get the components it needs for the iPhone 8 amid rumors of production difficulties.

The equipment cost Apple "tens of millions of dollars" and will be used to create the aforementioned circuit boards, which are a key component that connect parts like the iPhone's display and camera. A rigid flexible printed circuit board (or RFPCB), which combines both flexible and rigid technologies in a single board to conserve space, is reportedly more difficult to produce than standard rigid or flexible PCBs.

iPhone 7 logic board, image via iFixit

Apple made the purchase after one of three suppliers it planned to source parts from backed out of the deal. Interflex and Youngpoong Electronics, two Korean companies, are said to be producing the components going forward.
"One of the three suppliers recently decided to back out," a source told ET News on condition of anonymity, saying that the supplier is a Taiwanese manufacturer.

The exact reason why the Taiwanese supplier withdrew from the deal with a big client Apple was not revealed. But sources say the firm may have felt a pinch on the tricky production and strict quality requirements along with low profitability.
With one supplier pulling out of the deal, Apple decided to make sure the remaining suppliers can meet capacity. "To fill the loss, Apple is supporting the other two suppliers, both Korean, to beef up production," said The Korea Herald's source.

Rumors have suggested Apple is struggling to produce several of the new iPhone's components, including the 3D sensor and the display lamination process, which many analysts believe is going to lead to some delay in production ramp up.

KGI Securities analyst Ming-Chi Kuo, who often accurately predicts Apple's plans, believes production ramp up could be delayed by a month or two, which means the iPhone 8 could be available in limited quantities with Apple unable to meet demand until late in 2017 or early in 2018.

Article Link: Apple Leasing Equipment to Suppliers to Make Sure Key iPhone 8 Components Get Made
 
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iLoveDeveloping

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"Tens of millions"? So, pocket change for Apple then? Tim Cook could pay that from his credit card... LOL Kinda a none story really? The biggest tech company on the planet buys machines to make their phones cos the companies they hire can't do it without apples INSANE amount of money. Got to love when apple throws around some cash to show them how it's done. Imagine being in control of that amount of money. They could almost create anything they want, even save hundreds of millions of lives in the process. I for one am so excited about where the Apple Watch is going - even if I hate it right now. Still always rooting for Apple to pull off the impossible..
 

Michaelgtrusa

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Oct 13, 2008
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"Tens of millions"? So, pocket change for Apple then? Tim Cook could pay that from his credit card... LOL Kinda a none story really? The biggest tech company on the planet buys machines to make their phones cos the companies they hire can't do it without apples INSANE amount of money. Got to love when apple throws around some cash to show them how it's done. Imagine being in control of that amount of money. They could almost create anything they want, even save hundreds of millions of lives in the process. I for one am so excited about where the Apple Watch is going - even if I hate it right now. Still always rooting for Apple to pull off the impossible..
Saving hundreds of millions of lives in the process doesn't seem to be a priority for them.
 

lazyrighteye

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Interesting.
I can't recall so many rumored production issues with an iPhone this late in the game. Fair to expect some rather significant delays - which, if the shipping device does include some [not all] of the major rumored features, I'm ok with a delay. I just want them to get it right. I have been waiting, with my trusty 6 in-hand, on the next major device upgrade. What's a few more months?

Seems the fall keynote, at Steve Jobs Theater, will tout the 7s and 7s plus. The 8 will be saved for a "one more thing" nod to Steve moment. Fun will he had. All 3 devices will be available for preorder the following week. The 7 series will ship within a month (end Oct.). The 8 ships some time in Dec. Just in time for the holidays.

But please Apple, do not rush this. We'll totally wait. Some will gripe. Ok, most will gripe. But we'll wait.
 
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coolfactor

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What on earth is 'rigid flexible'?
Yup, noticed this too. I think many online publications have lost the concept of quality editing. They just want to rush content out to get hits. Sad.

And for them to use the words twice in the article... clearly the author doesn't understand what "rigid" means, unless it means something other than what we all think it does?

Maybe Apple has invented something new??? haha
 
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djlythium

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Interesting.
I can't recall so many rumored production issues with an iPhone this late in the game. Fair to expect some rather significant delays - which, if the shipping device does include some [not all] of the major rumored features, I'm ok with a delay. I just want them to get it right. I have been waiting, with my trusty 6 in-hand, on the next major device upgrade. What's a few more months?

Seems the fall keynote, at Steve Jobs Theater, will tout the 7s and 7s plus. The 8 will be saved for a "one more thing" nod to Steve. Fun will he had. All 3 devices will be available for preorder the following week. The 7 series will ship within a month (end Oct.). The 8 ships some time in Dec. Just in time for the holidays.

But please Apple, do not rush this. We'll totally wait. Some will gripe. Ok, most will gripe. But we'll wait.
I think you nailed it.
 
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Relentless Power

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Jul 12, 2016
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This launch is in trouble.
Gonna be a Train Wreck. Too much too fast. :apple:
Is it possible there could be a delay, yes. But to label the launch in trouble or a train wreck, seems far fetched to say that yet. Apple wouldn't put themselves in a position where the iPhone would not launch accordingly without reason. I Think these rumors have tendencies to skew ones thinking of what we really understand when it comes to production and what someone tends to believe is reality .

But ultimately, I would rather have there be a delay to ensure this new iPhone is manufactured properly versus having it be a complete debacle. I think Apple would feel the same, as it's their goal to deliver the best possible product.
 

kdarling

macrumors P6
The biggest tech company on the planet buys machines to make their phones cos the companies they hire can't do it without apples INSANE amount of money.
One reason Apple has insane amounts of money, is because they don't pay suppliers enough to be able to buy or lease the equipment on their own.

Plus this way, if a supplier backs out, Apple can pull out the equipment as well.
 

ApfelKuchen

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Yup, noticed this too. I think many online publications have lost the concept of quality editing. They just want to rush content out to get hits. Sad.

And for them to use the words twice in the article... clearly the author doesn't understand what "rigid" means, unless it means something other than what we all think it does?

Maybe Apple has invented something new??? haha
Can't blame the editors. Seems the term has been in use for quite some time. This manufacturer page explains it: http://www.flexiblecircuit.com/product-category/rigid-flex/
 

kdarling

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kdarling

macrumors P6
Hard to envisage how such a thing could be useful
It's because of trying to fit everything into a tiny space, interconnected by many flexible cables.

The problem with those connections is that they are a weak spot.

Rigid-flex solves that problem by making the flexible sections actually be part of the rigid circuit sections. Thus it becomes really one long or multi-arm circuit, with no connectors to accidentally come apart after a bump, or to fail with bad solder joints, etc.

On the downside, that means board replacement involves a bigger circuitry section.
 
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lazyrighteye

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Jan 16, 2002
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Is it possible there could be a delay, yes. But to label the launch in trouble or a train wreck, seems far fetched to say that yet. Apple wouldn't put themselves in a position where the iPhone would not launch accordingly without reason. I Think these rumors have tendencies to skew ones thinking of what we really understand when it comes to production and what someone tends to believe is reality .

But ultimately, I would rather have there be a delay to ensure this new iPhone is manufactured properly versus having it be a complete debacle. I think Apple would feel the same, as it's their goal to deliver the best possible product.
Agree. "Nothing is F'd here, Dude."
Ready to deliver or not, [at the keynote] they'll definitely show us a gorgeous new 8 video, talk features, demo working devices. And we'll all fall over ourselves and set our alarms to happily wake to place our orders. Grins on our faces.

While I'm here - I so miss the excitement and camaraderie that were the launch day lines. Of all the criticism slung Angela's way, that's the one I do think she got wrong. I feel some of Apple's soul died with that business decision. It was such a good time. A differentiator. An event whose optics - from a brand perspective - were immeasurable. Untouchable. Every local news station would send a crew to their Apple Store to cover the lines. Launch days are now so sterile. Uneventful. Like so much of our social media experience: solitary. Isolated. Waking at 3am to place an online order couldn't be any further removed from the launch day line experience. And the "convenience" argument just isn't worth it. For me. At all.
 
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The practice of developing (or buying) your own production gear and then leasing it to the companies who are subcontracted to produce the parts is not at all unusual and something that BMW has done on the car front for decades. It means the subcontractors don't have the worry about under-utilised assets when production plans are changed, and it allows the customer company (Apple, BMW) to make design changes without having to involve the production company and the lack of secrecy that involves.