Severe Supply Shortages Again Rumored for iPhone 8 Due to Production Difficulties

[MacRumors]

There have been several rumors suggesting the upcoming OLED "iPhone 8" could potentially be delayed due to production delays, and in a new note to investors sent out today, KGI Securities analyst Ming-Chi Kuo reiterates his prediction that production ramp-up will be delayed.

According to Kuo, who titled his note "Rising probability of worst-case scenario for iPhone shipments," production ramp-up of the iPhone 8 could be delayed to "as late as October-November," a departure from Apple's traditional August to September ramp-up period.

The result will be "severe supply shortages" that persist for "a while" after the new iPhone models are introduced in September. To be clear, Kuo continues to believe Apple will introduce the iPhone in September, but he suggests there's a strong possibility the device will be hard to come by for several months following its release.

"iPhone 8" mockup with rear Touch ID sensor by Benjamin Geskin​

Due to the possible iPhone 8 shortages, Kuo believes Apple may only ship 80 to 90 million iPhone units during the second half of 2017, down from 100 to 110 million units. Kuo does say it's not clear if demand will fully shift to the iPhone 8, due to questions about the usefulness of a rumored 3D sensor, the potential for Touch ID to be eliminated, and market competition.

While we are positive on potential replacement demand triggered by OLED iPhone, it's too early to determine if demand will shift fully in that direction. We recommend investors keep tabs on the following issues: (1) whether the 3D sensor of OLED iPhone provides an innovative user experience; (2) whether OLED iPhone cancels Touch ID (fingerprint recognition); and (3) whether Apple's competitors launch more innovative products which could compete with OLED iPhone in 4Q17-2Q18.

It is not unusual for us to hear rumors of production delays and supply shortages ahead of an iPhone release, and indeed, the iPhone 7 Plus was constrained for months after its launch, but the warnings about the iPhone 8 are popping up more frequently from trusted sources and are more dire than warnings we've seen for past iPhone release cycles.

Rumors have suggested that Apple is struggling with integrating the Touch ID fingerprint sensor underneath the glass of the iPhone 8, which has led to production difficulties. Due to these issues, rumors have also indicated that Apple could potentially put Touch ID on the back of the device or perhaps more unlikely, eliminate it entirely in favor of other biometric systems, like facial recognition. Kuo has not mentioned removing Touch ID entirely in previous research notes, but the wording of today's document seems to suggest he believes it's a possibility.

Apple is also said to be having trouble with the display lamination process and integrating a new 3D sensing front camera system into the device. Given the major design changes coming in the iPhone 8, including an edge-to-edge OLED display and a glass body, it is not surprising to hear that many of the new technologies involved are causing production problems.

Some rumors have suggested Apple could delay the debut of the iPhone 8 entirely, not introducing it in September, but most rumors believe the company will show it off at the event and perhaps launch it in small quantities.

Article Link: Severe Supply Shortages Again Rumored for iPhone 8 Due to Production Difficulties

 

[andy.ringwood]

Apple, take your time, embed Touch ID under the screen and release it before Christmas and I'll be happy (as others would be as well, I'm sure).

 

[blacktape242]

every year this is rumored.

 

[WoodrowCall]

This could be a pivotal year for Apple. They seem to be struggling to innovate, while also maintaining supply, for their flagship device, the iPhone. Meanwhile, Amazon is further pushing into a space that Apple has zero presence in, and cutting into video calling. This could be a big deal...

 

[arggg14]

I pre-ordered once and waited 3 months... Never again. Last time I walked in to a Best Buy 2 weeks after launch and found what I wanted.

 

[trainwrecka]

every year this is rumored.

How many people are actually worried by these? Of course it will be in short supply at launch through the holidays. Happens every year.

 

[v0lume4]

Uh oh... This isn't looking good.

I know we see these reports every year, BUT -- we seem to be seeing an awful lot of these reports this year, in increasing frequency. As a matter of fact, here's a quote from one of MR's articles from three days ago:

While some Apple fans will quip that "this same rumor surfaces every year," oft-reliable analyst Ming-Chi Kuo of KGI Securities implied this year's shortage could be much more "severe" than in previous years.

Source: https://forums.macrumors.com/thread...placing-touch-id-on-back-of-iphone-8.2044623/

 

[applelover1016]

Tell us whether or not the device will have the fingerprint sensor in the display. That's pretty much all we care about at this point, we know it's going to be limited and hard to get, it always is. These reports are literally reiterating the same things over and over lol.

 

[Sunny1990]

Every year we see this same report and iPhone is released at the normal schedule

 

[Vertigo50]

Let me go ahead and give you a preview of the months between now and the release date for the next iPhone:

Rumors point to shortages

Rumors of shortages may have been wrong

Rumors point to shortages

Rumors of shortages may have been wrong

Rumors point to shortages

Rumors of shortages may have been wrong

Rumors point to shortages

Rumors of shortages may have been wrong

Rumors point to shortages

Rumors of shortages may have been wrong

Rumors point to shortages

Rumors of shortages may have been wrong

Release Date

 

[Sheppard]

Surely just unveil this in October and give us a Mac event in September

 

[prowlmedia]

This literally is the Sponsored by Ming-Chi Kuo Website isn't it. I do wonder how much money KGI securities have made from this repetition of rumors as claims of inside knowledge?

 

[doboy]

I'm sure it's going to be supply constrained more so than ever.

 

[Andres Cantu]

With 7s and 8, this is the first time a shortage actually sounds credible.

 

[Avieshek]

What is this tic-toc everyday.

 

[44267547]

Hope they perfect touch id under the display

Perfection? How about function over form, when I'm not concerned about "Perfection" as long as Apple does not place touch ID on the back of the iPhone. Functionality is more fundamentally important in my opinion.

 

[JoEw]

Hate to be that guy but how does a 800 billion dollar company with more capital than most countries have trouble ramping their bread and butter product?

Yes yes it's a big endavour to scale a device as popular as the iPhone but Apple has had a lot of time to work on this. The 7 was basically 6ss I thought because this phone was taking priority.

 

[ElQben]

To keep fans amused in the meantime, here's an easy one Apple...make an iBook already. IMO, Apple is missing a "laptop for normal people/millennials". I think they should make a (fairly ho-hum) clam-shell laptop that runs a version of iOS that is customized to allow for windowed apps and is also mouse + right-click friendly. If they started it at $699 or so, I think would appeal to A LOT of people who aren't really interested in learning all the ins-and-outs of MacOS. I'd call it the iBook, and it would sell like crazy.

 

[morcutt11]

This could be a pivotal year for Apple. They seem to be struggling to innovate, while also maintaining supply, for their flagship device, the iPhone. Meanwhile, Amazon is further pushing into a space that Apple has zero presence in, and cutting into video calling. This could be a big deal...

I would argue that it is innovation that is driving this (supposed) delay in production. So I'm not sure why you would cite a lack of innovation. Also, I wouldn't call FaceTime a "zero presence" in video calling...

 

[gkarris]

oh boy, can't wait for those that "get a new iPhone every time a new one is released" to be waving their's around on launch day....


can't wait...

 

[OldSchoolMacGuy]

We've heard this rumor with the previous 4+ iPhones and it's never been the case. Yes, demand has always been greater than supply but that's part of how you keep people clamoring for your product.

 

[dantracht]

Every year the same thing. Still, 7S+ for me.

 

[Vege-Taco]

I just want to know where I can get the Clown Fish background image.

 

[78Bandit]

These rumors are getting ridiculous. One day the iPhone 8 is going to be delayed, the next day it will be on time but the touch ID will be moved to the back, and the next day everything is perfectly fine. I realize this is a rumors site, but all this does is confirm we have absolutely no idea where Apple stands.

If Apple is going to have a mid-September launch you can be sure they have finalized the design by now. Product will have to be shipping in just over four months. No way something as big as deciding between a new under-display front sensor or a traditional sensor located on the rear is still up in the air. Pretty much everything else in the phone (case, display, and battery being the main items) would have to be designed around this component placement.

From a financial standpoint it could make sense to delay the launch until after October 1. Sales will likely be pretty flat through the end of this fiscal year, Tim Cook has already publicly blamed customers waiting on the iPhone 8 as one reason sales dropped this past quarter, and packing all the sales into the first quarter of Fiscal 2018 would give a bigger punch to the sales number when comparing year-over-year growth. Shifting those 20 million units into next year would make 2018 look better at the expense of 2017, but I think expectations for 2017 are already pretty tempered.

 

[jmpage2]

Samsung - "we've run out of time and we've got to launch on time and in sufficient quantity to meet customer demand... customers are going to be pissed but put the fingerprint sensor on the back of the phone".

Apple - "hold my beer".