Foxconn Begins Shipping iPhone X But First Batches "Are Smaller Than Expected": DigiTimes

Tyler Durden's picture

While Apple's troubles with the iPhone 8 (which is being outsold by the iPhone 7) have been duly discussed in recent days and largely ignored by Wall Street, whose hopes remain pinned on the iPhone X, the latest update from DigiTimes is even more concering, as it suggests that general demand for the entire Apple product suite may be lower than expected. According to Digitimes, iPhone assembler Foxconn has reportedly started shipping iPhone X units, however the first batches smaller than expected. Foxconn has shipped off the first batch of 46,500 units from Zhengzhou and Shanghai, heading for the Netherlands and United Arab Emirates respectively, DigiTimes cited Xinhuanet.

Apple will start to take pre-sales order on the iPhone X on October 27 and has said it would start delivering the devices on November 3. However, the low number of the first batch would suggest that the new X-mobel might be one of the more “hard-to-get” smartphones on the market these days.

Foxconn has now ramped up its output of the new iPhone flagship from 100’000 units on a weekly basis to 400’000, the report continues, although it is unclear if this increase will be enough to meet market demand.

Separately, TechCrunch confirms that for whatever reason Apple is not producing enough iPhone X units for first weekend sales, citing a new report from KGI Securities analyst Ming-Chi Kuo, according to which "Apple is still facing supply chain constraints for the upcoming iPhone X. The company will have around 2 to 3 million units before the launch on November 3rd, which shouldn’t be enough to meet demand."

While Apple didn’t disclose exact numbers for first weekend sales last year, the company sold 13 million iPhone 6s units during the first weekend, 10 million iPhone 6 units and 9 million iPhone 5s/5c units. The iPhone 8 is already available, which could mitigate demand for the iPhone X, but it sounds like many buyers will be disappointed by Apple’s initial stock.

The suggested reason is that Apple's supplier-chain is simply unable to keep up:

According to KGI Securities, Apple now uses a flexible printed circuit board for the antenna. This is not your average circuit board, so Apple has had issues finding suppliers that can produce those components at scale. Murata was supposed to be the main supplier for this part, but it sounds like the company can’t meet Apple’s strong requirements. Since then, Apple has found a new supplier, which created some delays.

 

On the camera front, Apple is using a different circuit board for each sensor. Other phone makers only use one circuit board. This custom design has also been a challenge.

Finally, as the Nikkei adds, iPhone X production continues to be plagued by problems with the dot projector, a component in the 3-D sensor module used for facial recognition, and a problem is that "according to an industry executive familiar with the 3-D sensor issue said that while the yield rate has improved, it has not reached a satisfactory level."

"The temperature may be down a bit, but the fever persists," the executive said.

 

The executive added that the yield rate for 3-D sensors will not reach a level that will allow suppliers to churn out the iPhone X at their full capacity by the end of October.

iPhone X pre-orders start on Friday, October 27th at midnight Pacific time, and while production should ramp up in the coming weeks, TechCrunch notes that "it sounds like it could take months before you can just walk in an Apple store and buy a new iPhone X." It concludes that "It’s going to be interesting to hear Tim Cook’s comments on those supply chain issues when Apple announces its quarterly earnings in a couple of weeks."

The questions Cook will face are three: i) why did Apple ignore the problems in its supply chain until it was so late, ii) what will the delayed deliveries mean for Apple's Q4 and subsequent bottom line, and iii) a question we doubt will be asked but everyone will be thinking, is whether these supply bottlenecks were on purpose, designed to create an artificial product shortage while boosting the latest phone's "hype and coolness" factor.

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taketheredpill's picture

Decoy Pricing.  The iPhone 8 is the decoy.

No iPhone 9 because 789.

 

Fester's picture

BS.  No way they changed the size of the phone.  Too much went into the design to make last minute changes.

Shitonya Serfs's picture

Sounds like Apple is making up a story to juice up demand on Oct 27.

silverer's picture

I thought that was the job of the central banks?

Mtnrunnr's picture

consumers tapping out or maybe people aren't down with facial recognition?

spastic_colon's picture

earnings coming up so they must dampen expectations so their shitty earnings report actually looks awesome and new highs and banker bonuses will follow into year-end duh

Endgame Napoleon's picture

Sigh, it looks like most consumers want to throw the Fouth Amemdment down the sink hole. Something tells me this mindset will not last forever. Tech will not be fresh and novel forever.

The multi-board camera does sound superior, though, probably accounting for the promised depth and shading capacity. I wonder if a “flexible circuit board” means that it is printed on a 3-D printer.

According to some articles, you can turn the facial recognition off.

https://www.google.com/amp/www.techrepublic.com/google-amp/article/how-t...

german Wunderkind's picture

Are you retarded? the headline say that they have smaller batches, and not smaller phones...

Starvation 2017's picture

"I didn't read the article" - The Comment

Bill of Rights's picture

Galaxy Note 8 here...love it.

Consuelo's picture

 

 

That thing is on my list.   The old lady's Galaxy Note (2) is limping...   5+ years of nearly 16 hours/day use and still running though...

Aside from the 'bling', how is the real-world functionality so far...?

Endgame Napoleon's picture

The Note has a pen. Apple needs to include a pencil with such a pricey phone. Apple caters to the art crowd with the camera. They need to add a drawing device. That is the only thing Jobs was wrong about: fingerpainting

flapdoodle's picture

"Wow... you have one of those new $1000 iPhone Xs!"

 

"Yeah, it costs $1000"

 

"Why do people want one so badly?"

 

"Because it costs $1000"

 

"Oh"

yogibear's picture

Many millenials and Wall street people would be willing to pay $2,000 for the newest iPhone.

Apple has the right idea. Keep raising prices in a captive audience environment.

After the $2,000/iphone, target should be $3,000.00.

Apple fans willing to pay any price for an iPhone. They're addicted.

 

Endgame Napoleon's picture

No. The X has the capacity to do fully shaded photos with much more depth. That is a big deal for some people, not just photographers. Other types of art benefit from the [[[[detail]]]] in such photos, as opposed to ordinary photos that flatten images by bleaching out the light areas and flattening the dark areas, omitting the detail in shadows and reflections that creates a sense of depth.

silverer's picture

Now watch the central banks insure Apple's success even when Apple has declining sales. It's a miracle of make believe productivity! Got to keep those phantom pensions funded!

Greenspazm's picture

Apple is a bank and a stock conduit with a sideline in mediocre overpriced electronic products.

ebworthen's picture

I'm pretty sure you meant "...watch the central banks ensure Apple's success..." but yes, agree with you, no failure allowed!  (unless you are an individual - in which case the banksters say "Get back to work serfs!")

Endgame Napoleon's picture

Why does Apple stock affect pensions? I read ZH, but I really do not understand that connection.

Arnold's picture

Large stable holdings in pension funds.
Swiss National Bank (SNB) has large holdings as well.

SloMoe's picture

$1000 phone--that's obsolete in a year and a half? No thank you.

TheSilentMajority's picture

It is already obsolete.

The intel modems that Apple uses in ip8/x cannot handle the new gigabyte/sec cellular services now available and utilized by Samsung and other competitors.

The iphone 8 and X are already obsolete turtles!!

flapdoodle's picture

Yeah, but the new iPhone X comes with a special Grindr app that hooks directly to the phones vibrator mode so you can have virtualized anal sex with other iPhone X owners! It even recognizes individual asses and changes the vibrator settings accordingly...

roddy6667's picture

"recognizes individual asses"

Fecal recognition software.

Greenspazm's picture

Pre-order for iPhart X -- is that like a Tesla pre-order?

"Delivery November 3" -- they didn't say which year.

buzzsaw99's picture

that way the recall will be smaller.  smart.

shizzledizzle's picture

Channel stuff those bitches!

tangent's picture

I'll pay ten times the price for ten times less buttons. $1,000. I would pay $3,000 if they would take away any five features from here too. I don't understand what is going on, so five less feature would make it the perfect phone.

shizzledizzle's picture

Mac users have more money than sense. Always been that way. Steve Jobs was a visionary... when it comes to separating idiots from their money.

https://www.youtube.com/watch?v=PADkpyVWAwQ

 

flapdoodle's picture

Thought experiment - you are a car thief, and find two BMWs parked side by side. Oddly enough, they are the same model, same year, same color, same condition. (Substitute BMW with your favorite brand/model).

 

But one BMW has an Apple decal, the other one doesn't.

 

Question: Which BMW do you steal??

any_mouse's picture

Now run the scenario with a Bitcoin decal.

Ben A Drill's picture

Cost more to replace glass back than the actual screen I've been told.

Endgame Napoleon's picture

Glass backs are beautiful. Just be careful with it.

FoggyWorld's picture

May be beautiful but a pain in the neck to keep shiney clean.

Byrond's picture

How many of these taped together on an Amazon box do you need to make an iPhone Cube? 20 or so? Still less than most cars. Does it comminicate with the Starship Enterprise? If I tell it to beam me up, what happens? Do I end up in a factory in China? 

TheSilentMajority's picture

Apple profit warning coming in 3,2,1.....

Watch this space.

Consuelo's picture

 

 

"The questions Cook will face are three:"

 

No, actually only (1) not listed:

 

Why don't you have an in-house manufacturing facility (like you used to) here in the United States, where nearby vendors of sheet metals, plastics, fabrications, chip manufacturers, and the other various & sundry suppliers of i-whatever components, can feed said facility and thus avoid these now-ubiquitous 'delays' of Apple products...?

 

 

Endgame Napoleon's picture

So true. If Apple moved it all back here, there would be a lot of spin-off jobs. It would add a little to the price, but people are already paying more for it. Apple should be an American’s American product, mostly high-end and Made in the USA with a few price-down alternatives.

Mullet Master's picture

What a rip off price for this new APPLE phone!

APPLE has been caught slowing down their operating systems on older phones to make their customers think that by upgrading to a new phone, the operating system seems faster so the user thinks that by upgrading, it was a good purchase. SCAM. Just another rigged system just like the voting system in the U.S.

Fiat Burner's picture

You are a fucking moron is you buy a $1,000 phone, especially one that scans your face. 

TheSilentMajority's picture

Hmmmm....Pay an EXTRA $500 for an unreliable face scanner and the removal of the convenient and reliable fingerprint scanner??

Sounds like a bargain!!

hannah's picture

the price of the new phone reflects the fact that people are not buying a laptop or desktop any longer. the phone does everything a person needs...so apple can increase the cost of the phone. the problem is people dont have the cash/credit now. they are tapped out.

 

people claim that customers dont liek this or that...screw that. the apple fanbois i know will buy ANYTHING with an apple logo. i know people that bought a iphone to carry around in thier hand and use till the battery died and then switch over to an android phone for the rest of the day. they paid for 2 phones because the iphone battery wouldnt make it a whole day.....those days are now over.

BocceBaal's picture

I can't wait until it's released and we see side by side pictures of people the face scanner can't tell apart, followed by allegations that the technology is racist.

Megaton Jim's picture

Fucking incredible, paying $1K for a phone that is still playing catch up with Androids. The Cult of Apple strikes again!

Endgame Napoleon's picture

If I start another luxury item business, you ZHedgers will not be my target market. You guys just want to save a dime.

Mike Masr's picture

I want the Galaxy 8 fuck that apple shit!