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Apple Taking 'Cautious Approach' to iPhone Assembly This Year, Lowering Component Orders by 20%
Apple recently asked its iPhone suppliers to build "around 20 percent fewer" components for the line of iPhones debuting in the second half of 2018, according to four sources speaking to Nikkei. The move is Apple's attempt to take a "cautious approach" to iPhone shipments in 2018 compared to 2017 orders.
Specifically, last year Apple was said to have placed orders for the production of as many as 100 million iPhone 8, 8 Plus, and X units. That number is now down to 80 million in 2018, according to the sources. In the wake of Nikkei's report, Apple shares have fallen in premarket trading this morning.
Apple is believed to launch three new iPhones in 2018: a 6.5-inch "iPhone X Plus", a second generation iPhone X, and a 6.1-inch LCD iPhone, all coming with a full-screen design and Face ID. According to Kuo, the price of the devices will start at $600-$700 for the LCD model, $800-$900 for the new iPhone X, and $900-$1,000 for the iPhone X Plus.
Specifically, last year Apple was said to have placed orders for the production of as many as 100 million iPhone 8, 8 Plus, and X units. That number is now down to 80 million in 2018, according to the sources. In the wake of Nikkei's report, Apple shares have fallen in premarket trading this morning.
"Apple is quite conservative in terms of placing new orders for upcoming iPhones this year," one of the four sources, who is in the supply chain, told the Nikkei Asian Review. "For the three new models specifically, the total planned capacity could be up to 20% fewer than last year's orders."Nikkei's report corroborates recent claims made by TF International Securities analyst Ming-Chi Kuo, stating that all three new iPhones will ship in September 2018 (two OLED models measuring in at 5.8 and 6.5 inches and a 6.1-inch lower-cost LCD model), despite some reports claiming that the LCD model could launch slightly later.
"The production yield for the LCD model's 'touch' function is not satisfactory at the moment, but it is improving," one of the supply sources said. "The cost-effective model is viewed as the tool for Apple to boost its total shipment volume this year, and all the suppliers are doing everything they can to make sure the LCD one hits the shelves as soon as possible."The sources said that Apple informed its supply chain to "prepare earlier" for this year's OLED models in a bid to ensure that the smartphones can launch in September, unlike the iPhone X's delay to November in 2017. Now, components for these smartphones will arrive at assemblers like Foxconn and Pegatron for final assembly in July, while the same will occur for the LCD model in August.
Apple is believed to launch three new iPhones in 2018: a 6.5-inch "iPhone X Plus", a second generation iPhone X, and a 6.1-inch LCD iPhone, all coming with a full-screen design and Face ID. According to Kuo, the price of the devices will start at $600-$700 for the LCD model, $800-$900 for the new iPhone X, and $900-$1,000 for the iPhone X Plus.
Related Roundup: iPhone XS
Buyer's Guide: iPhone XS (Neutral)
[ 195 comments ]
Top Rated Comments
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9 months ago
I'm in no rush for a new iPhone. My 7 has been working perfectly well and I don't want a phone that's ALL glass. With the $29 battery replacement I expect my phone to keep working fine for another 2 years. After the 7, there hasn't been any new features that I "must have". I suspect we're nearing, or have already hit, smartphone peak.
9 months ago
Every year the stock manipulators spread false rumors of production cuts and production difficulties. Every single year. And every year everyone falls for it.
9 months ago
Here we go again with the absurd rumors that turn out to not be true most of the time.
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The upgrade program requires 12 payments before qualifying for an upgrade.
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Wonder how apple will handle those on the Apple Upgrade Program who bought an iPhone X in November and wish to upgrade to an iPhone X Plus in September. Will they do an even swap or will they make you pay the remaining 2 payments?
The upgrade program requires 12 payments before qualifying for an upgrade.
9 months ago
Calling it now: analysts will again put too much emphasis on some supply chain numbers that don’t directly correlate to how many iPhones will be sold, and Apple will have another record quarter due to an iPhone XS Plus. As usual there will be relentless negativity.
9 months ago
Looks like we are getting an early start on shorting the stock this quarter. Guess it wasn't as effective as they'd hoped last quarter.
9 months ago
I love how 700$ is considered the low budget iPhone when the high end iPhone used to cost like 640€ back in the day
9 months ago
Obviously some publications learned nothing from the past 2 iPhone X quarters. Let me say it slowly. You. Can’t. Know. About. Sales. By. Looking. At. The. Supply. Chain. Yet, here we are again, dutifully reporting the “doom and gloom” from a company proven to be wrong about the iPhone X. At what point does the media become complicit by giving the fire oxygen? This has gotten so completely ridiculous.
9 months ago
I believe that Apple is between a rock and a hard place regarding upcoming iPhone sales this fall, but it is a situation of their own making. For the last several years phones have had serious software and hardware issues but new features were what Apple decided to concentrate on and not fixing problems with current code or adequately testing what limitations new IOS’s had with 2-5 year old iPhones.
Because of very bad publicity they made a decision to concentrate on fixing problems and trying to produce a stable and reliable OS that works at least ok even on older phones.
But this means new features have to be delayed for this years models. Not that there won’t be ANY new features, there will, but features will probably be more evolutionary rather than revolutionary.
It was a conscious decision Apple made for the past few iPhones and IOS updates to highlight new features and just band-aid known problems, but at some point they were going to have to spend the time and resources to actually fix things. Evidently that time is this year. Hopefully. But it will negatively affect phone sales this fall.
Because of very bad publicity they made a decision to concentrate on fixing problems and trying to produce a stable and reliable OS that works at least ok even on older phones.
But this means new features have to be delayed for this years models. Not that there won’t be ANY new features, there will, but features will probably be more evolutionary rather than revolutionary.
It was a conscious decision Apple made for the past few iPhones and IOS updates to highlight new features and just band-aid known problems, but at some point they were going to have to spend the time and resources to actually fix things. Evidently that time is this year. Hopefully. But it will negatively affect phone sales this fall.
9 months ago
Apple is stupid for this. So theyre gonna tell me i need to pay another $100 before i can get a new phone lol Apple sucks.
Then don't agree to the terms of service and buy your phone some other way. I don't see the issue.
9 months ago
At what point do rumor sites stop printing this garbage? Every year it’s the same crap then Apple reports record numbers. Rinse and repeat.
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