Some of Apple's upcoming 5G iPhones could see a delay in production, according to Apple analyst Ming-Chi Kuo in a note shared with investors. mmWave models, which will feature the fastest 5G functionality, have a "potential delay risk" and may launch outside of the normal timeline.
Production on the mmWave iPhone may be pushed back because of changes to the antenna package that were made in early April, and delays in qualification process services.
The mmWave iPhone will be pushed back because the design of the antenna in package (AiP) changes in early April. Additionally, the test lab is closed and can't offer qualification process services. If the pandemic can't be controlled well until July, then we think that the shipment allocation of mmWave iPhones will decrease to 5-10% from 15-20%.
Kuo says the rumored 6.1-inch and 5.4-inch iPhones will go into mass production in September, but mass production on the larger 6.7-inch iPhone will be delayed until October because it has the "most complicated" design.
Apple decided to start the online qualification process remotely and delegate more tasks to local employees for new iPhone development. The change takes time; therefore, it had caused a one-month delay in entering the engineering verification test (EVT) for all new 2H20 iPhones. We believe that there is a likelihood that new 2H20 6.1-inch and 5.4-inch iPhones will go into mass production in September. The mass production of the new 2H20 6.7-inch iPhone will be delayed to October because this model’s design is the most complicated.
Delaying mass production on the 6.7-inch iPhone until October would result in the iPhone launching later in the fall than expected. Other rumors have also suggested Apple could stagger iPhone launches this year due to production and verification process delays.
According to Kuo, iPhone SE sales were better than expected, but overall demand for iPhones is down. In the worst case scenario, Kuo estimates second quarter iPhone shipments of 29 to 32 million units, declining 20 to 25 percent year over year.
If consumer confidence and purchasing power recover in the third quarter of 2020, iPhone shipments could fall as little as 10 to 15 percent year over year.