KGI: iPhone X Production Woes Ending, but Only 2–3 Million Units Available for Launch

[MacRumors]

With just one week to go until pre-orders for the iPhone X begin, KGI Securities analyst Ming-Chi Kuo has released a new report indicating that the "worst [will] soon [be] over" with regards to production difficulties.

According to Kuo, the biggest hurdle has likely been the flexible printed circuit board (FPCB) for the device's antenna, due to increased complexity and initial supply chain partner Murata's inability to meet specifications.

Special materials, recipes, design, processes, equipments and tests are required for antenna FPCB, as the specifications for iPhone X antenna (supplied by Amphenol (US)) are higher than those of iPhone 8 and only Murata (JP) and Career Tech (6153 TT, NT$30.1, NR) can meet Apple's requirements. Murata (originally with a 60% order allocation or higher) won't be able to resolve its issues before 2Q18, and thus has been fully replaced by second supplier Career. We believe Career will ramp up in November, as capacity expansion takes time, and its materials, recipes, design, processes, equipments and tests are different from those of Murata.

A secondary bottleneck appears to have been the FPCB for the wide-angle rear camera lens. Unlike competing dual-lens camera smartphones from Samsung and Huawei, the iPhone X's wide-angle and telephoto lenses use separate PCBs, and supplier Interflex has reportedly struggled with quality issues on the part for the wide-angle lens.

The third bottleneck that has received signifcant attention in recent weeks is the TrueDepth camera's infrared dot projector, or the "Romeo" component. According to Kuo, previous design issues that led to poor facial recognition have been addressed and the "worst is behind us."

Overall, Kuo is cutting his iPhone X shipment estimates for the fourth quarter to 25-30 million units, down from 30-35 million, and he expects that 2-3 million units will be shipped into distribution channels ahead of the launch. As a result, initial supplies will be very tight, as has been extensively rumored. Kuo says shipments will "pick up markedly" in the first quarter of 2018.

Article Link: KGI: iPhone X Production Woes Ending, but Only 2-3 Million Units Available for Launch

 

[scrapesleon]

My blood pressure almost went up...

 

[jsmith189]

My notification definitely said 23 million units, I got excited for a second then...

 

[Cosmosent]

It will be very interesting to see how the Stock Price responds to this news Friday morning.

 

[infinitejest]

How many iPhone 7 were available on launch day last year?

 

[MH01]

Same same same stories each year. Just marketing spin to drum up publicity and get you to pre-order. Pattern repeats

Edit : these stories get clicks - so ads - and side benefit is that Apple gets publicity

 

[TheShadowKnows!]

"Ho ho ho" my ass ["design issues that led to poor facial recognition" attested by Craig Federighi]

 

[PickUrPoison]

It will be very interesting to see how the Stock Price responds to this news Friday morning.

And when did Kuo’s clients receive the news; could have been Wednesday for all we know.

My guess is this rumor has already priced in. There is no legal requirement for Kuo to release his rumors to his clients and the public at the same time

 

[Mr. Donahue]

I am not hyped. I will not buy this phone.

 

[GadgetBen]

23 is my lucky number. Not long left to wait!

 

[dragicon]

My 7+ has recently been plagued by safari constantly freezing... the home button has allowed me to close it. Gestures anywhere on the screen did not work. I really would be worried about a phone that doesn't have a physical button.... I guess that's just me though.

 

[lordofthereef]

50+ countries with 3 million projected for launch. This should be great...

 

[mariusignorello]

Strap in and get your credit cards warmed up!

 

[rafark]

I don't believe him.

 

[snarlz]

He’s not normally far off the mark. This is going to be one hell of a scramble! I’ll be happy if I have one before Christmas at this rate.

 

[meaning-matters]

"Ho ho ho" my ass ["design issues that led to poor facial recognition" attested by Craig Federighi]

What do you mean?

 

[Cosmosent]

And when did Kuo’s clients receive the news; could have been Wednesday for all we know.

My guess is this rumor has already priced in. There is no legal requirement for Kuo to release his rumors to his clients and the public at the same time

I agree with what you say, but it will be "new" News to most who Trade AAPL.

 

[Joker45]

Shipments will pick up in first quarter 2018! Yea half way to the next iPhone release. Enjoy your 6 months with a new phone you waited 6 months to get.

 

[Seoras]

Can't wait to get one. Working with an emulator of it for several weeks now has me totally sold.
Wife is sick of the cruddy Android I loaned her (I have to have one to test apps on) when she broken her own iPhone.
She's getting my old iPhone when I get my X.

Was there enough flame bait in there?

 

[Bazooka-joe]

50+ countries with 3 million projected for launch. This should be great...

If true then with such constrained supplies I think that the initial launch will only be to a handful of countries. Perhaps 2 million phones to the states. Half million to the U.K. and Germany and the rest to China. I can’t see worldwide launch till next year.

 

[BaltimoreMediaBlog]

What do you mean?

He meant this. The iPhone X demo where Face ID fails for Craig Federighi.

Ho Ho HO!

 

[Amplelink]

If true then with such constrained supplies I think that the initial launch will only be to a handful of countries. Perhaps 2 million phones to the states. Half million to the U.K. and Germany and the rest to China. I can’t see worldwide launch till next year.

Well either that or most to the US and then a smattering elsewhere. And, of course, regardless of how many China gets, you can bet that many of the US phones will end up there regardless.

 

[bmot]

If all those issues pop up now during production I wonder if they have prototyped the phone enough? Sounds like it was a last minute call.

 

[44267547]

I am not hyped. I will not buy this phone.

I Don't think necessarily you have to be hyped to buy this phone. I think there are those who are generally interested in Face ID and a changes Apple has made after all these years having a similar form factor with LCD. I personally find it to be more exciting to finally see significant changes with this new iPhone X.

 

[Jsameds]

Same same same stories each year. Just marketing spin to drum up publicity and get you to pre-order. Pattern repeats

I suppose you think Apple are holding on to millions of phones and not shipping them to customers each year too?

https://www.macrumors.com/2016/09/09/iphone-7-pre-order-shipping-estimates-slipping/

https://www.macrumors.com/2015/09/12/iphone-6s-preorders-slipping/

https://www.macrumors.com/2014/09/12/iphone-6-shipping-estimates-slipping/

https://www.macrumors.com/2013/09/21/iphone-5s-shipping-estimates-slip-to-october/
[doublepost=1508483281][/doublepost]

"Ho ho ho" my ass ["design issues that led to poor facial recognition" attested by Craig Federighi]

He meant this. The iPhone X demo where Face ID fails for Craig Federighi.

Ho Ho HO!

Except it didn't fail, it performed exactly as it was supposed to.