Worried About Demand, Apple Tells iPhone X Suppliers To Slow Down Component Delivery

Following an embarrassingly dull rollout of the iPhone 8 last week, Apple's woes may be spreading to its flagship gizmo for the current product cycle, the iPhone X.

As Digitimes reports, Tim Cook's company has instructed component suppliers to "withhold part of the component shipments prepared for the production of iPhone X devices" according to unidentified Taiwan-based upstream suppliers.

The reason for the delay is that Apple is waiting to see the pre-sale orders of the iPhone X as well as the sales performance of the iPhone 8 and iPhone 8 Plus before pushing the production of iPhone X into full gear, said the sources.

The sources explain that iPhone X component suppliers are currently shipping parts and products that amount to only about 40% of the quantities originally planned for the initial production of iPhone X. However, despite the instruction for shipment slowdown, some suppliers still need to step up production to meet the 40% requirement due to low yield rates at their production lines, the sources indicated. Apple is said to have adopted the same strategy previously for iPhone 7 in 2016 - a phone which met with lackluster demand - during which initial shipments of parts and components reached only about 60% of the materials originally required by the vendor, with sources adding that Apple pulled in the remaining 40% of orders 1-2 months later.

Meanwhile, as Bloomberg reports this morning, in a double-whammy for Apple suppliers, their stocks have gotten hit in recent days on what is perceived as market disappointment with the company's latest product offering: on Monday Hon Hai fell 2.8 percent in Taipei, while Pegatron slumped 4.4 percent. TSMC dropped for a third day. AAC Technologies Holdings Inc., another supplier, retreated 6.7 percent in Hong Kong, and GoerTek Inc. capped its biggest loss since July 3 in China’s Shenzhen.

Hon Hai Precision Industry Co., which assembles the iPhone and other Apple devices, has fallen 10 percent in Taipei since Apple unveiled its collection of new gadgets for the holidays this month. Other suppliers across the region, including Taiwan’s Pegatron Corp. and South Korea’s LG Innotek Co. have plunged more than 12 percent. Taiwan’s $1.1 trillion equity market is particularly exposed to the swinging fortunes of Apple products, due to the dominance of parts manufacturers. Hon Hai and Taiwan Semiconductor Manufacturing Co., Apple’s main chip-maker, together make up a quarter of the Taiex total weighting, while exports account for more than half of the island’s gross domestic product.

"Orders of the new IPhone have disappointed the market and foreign investors may continue net selling Taiwan stocks," said Alan Tseng, Taipei-based vice president at Capital Investment Management. "The retreat of Apple suppliers has pulled down the benchmark index and could drag the index even lower in the coming month.

As a reminder, a channel check conducted last week by Rosenblatt Securities found that iPhone 8 pre-orders are "substantially lower" than iPhone 7 and iPhone 6 levels, with initial feedback suggesting that iPhone 8 volume is below predecessors in the U.S. and even more so in China.

Comments

new game Mr 9x19 Mon, 09/25/2017 - 08:06 Permalink

Demand Wanning!!! LOLPrice, baby price.fuking hilarious.fuking 1000 dollas for what? again tell me the value here?for a thousand dollas i can buy a pretty goddamn nice computer.fuken eh, apple has left the spaceship called price discovery.apple fuken loosers, fuken encripto mind control shitheads...

In reply to by Mr 9x19

bloostar new game Mon, 09/25/2017 - 15:02 Permalink

Price aside, what possessed them to release THREE new phones at the same time?! They also managed to skip the number 9 just so they could get the marketing boys to make a big sexy ‘X’ model on the front of a cardboard box. I’ve been a fan of Apple off and on over the years but no matter your allegiance, this is a step too far. Steve must be rolling in his grave.

In reply to by new game

nmewn Mon, 09/25/2017 - 07:38 Permalink

They should offer them in an array of color schemes and charge people twice as much for that so they think they're getting a great deal!Customers would break down the doors at Best Buy, why, it would look just like WalMart after Thanksgiving, trust me ;-)

nmewn pods Mon, 09/25/2017 - 07:54 Permalink

My secret wish is for the kiddies wake up and stop using their purchasing power to buy tracking devices used by paranoid schizophrenics in .gov and marketers in corporations. A simple two paragraph "terms of use" by network providers would be nice too.It could be shortened over time to "You are not anonymous using this device on our network!"...but...baby steps first ;-) 

In reply to by pods

pods Mon, 09/25/2017 - 07:41 Permalink

People are realizing that 800 every two years on a phone is better spent elsewhere. Shit, I still roll along with my 4+ year old BlackBerry Z10. Still does what I need, why change?pods

iveshrugged Mon, 09/25/2017 - 07:43 Permalink

3D scan of my face, kept on file who knows where?  No thanks, I'll pass.  Just more biometrics that big-tech can gather on us.  Freaking creepy . . .

cherry picker Mon, 09/25/2017 - 07:54 Permalink

Unfortunately apples tend to go bad after they have been off the vine long enoughI never did see an apple that had face recgnition, but it tasted pretty goodI usually throw apples out through the Microsoft windows I got.....Didn't like those windows either  

idontcare Mon, 09/25/2017 - 07:54 Permalink

Er um, nothing to see here but the law of "supply and demand".  Most people have figured out that the premium price tag for Apple phones is unwarranted so they are no longer buying them.

TheSilentMajority Mon, 09/25/2017 - 07:57 Permalink

The annual Apple con is exposed.

The sheep have finally learned that there is no significant reason to pay $1000+ to upgrade to either ip8 or X. The new phones are only slightly-upgraded versions of the ip6 from 2014!

The expensive fugly iwatch battery and connectivity stinks.

The expensive apple tv cannot even play youtube 4k.

The annual con is no more.

cherry picker Mon, 09/25/2017 - 07:58 Permalink

Anyway I sent my I Phone with the face recognition back to the dealer as it wouldn't recognize my face, but would recgnize my wife's face when she wore make up.  But when she tried using it in the morning before she put on her makeup, the I Phone puked and wouldn't let her in.

silverer Mon, 09/25/2017 - 08:08 Permalink

I have a better idea. The iPhone is a product that has reached maturity. Now you can now add crutches and medical care to it. You've had a good run, Cupertino. Dissolve the company except for the spare parts department and go pick REAL apples. People have to eat.

yellensNIRPles FSFT Mon, 09/25/2017 - 09:58 Permalink

I'm genuinely curious about this. I find it horrendous, but how many people either don't think twice about it, or worse love the idea?That should give us a sample at least of whether or not we have a chance at stopping this type of technology being used on us in consumer devices without any discussion of its implications whatsoever. I think we're fucked. I think the average person will bend over and let them chip their asshole if .GOV says it's for their safety or it's a cool new technology from Apple. We have crossed the Rubicon.

In reply to by FSFT

cherry picker Mon, 09/25/2017 - 08:26 Permalink

I had to get a new phone number after IPhone took my faceKept on getting all kinds of calls from these plastic surgeons and age cream sellers telling me they can get rid of my wrinkles.Then I started getting bill collector calls because my face resembled that of some scam artist.Got so bad I had to use a mask every time I used the phone, then the cops came for me because I covered my face illegally.Now I am wondering what to do, maybe go to one of those countries Trump banned so I can get some peace :) 

Kelley Mon, 09/25/2017 - 08:38 Permalink

Was it Bank Rate that reported 3/4th of households have under $800 in savings, and that half of all households live paycheck to paycheck?Who exactly is supposed to line up for these high ticket items? Millennials? They have student debt and are still nesting with mom and dad.Baby Boomers? They are overweight and have arthritis. No standing in line for them.That pretty much leaves GenXers. They are earning less than workers of their same age 30 years ago. Nor are they going take off work or lose sleep standing in line when they have a job to go to.

nicturations Mon, 09/25/2017 - 08:43 Permalink

my 3yr old $45 flip phone still works great , never needs updating , gets 3 day battery life and does not distract me with farcebook , twits , and other dumb "smart " apps . I'm looking forward to the day I can dump my cellular tracking device for good . I got by without one from 2008-2013 until i needed one for work again - it was bliss