News Ticker

iPhone’s Summer Production Glitches Create Holiday Jitters

iphone-8-rollout-wsj

The widely anticipated 10th-anniversary iPhone, with an expected base price near $1,000, hit a speed bump or two related to its OLED display.

Yoko Kubota in Tokyo, Tripp Mickle in San Francisco, and Takashi Mochizuki in Tokyo report: Apple Inc.’s new iPhone, which is expected to be unveiled Tuesday, was plagued by production glitches this summer, according to people familiar with the situation, which could result in extended supply shortfalls when customers start ordering the device later this month.New iPhones typically are in short supply when first released. But if shortages of the new phone extend beyond the initial sales period, which is expected to begin Sept. 22, analysts and investors could dial back their projections for sales in the crucial holiday period.

The glitches, which occurred early in the manufacturing process, set back the phone’s production timetable by about a month. Foxconn Technology Group, the Apple contractor that assembles iPhones, has been ramping up production at its complex in Zhengzhou, China. The company is paying bonuses to employees who can help bring new hires on board at its Zhengzhou plant, which Foxconn said in June employs about 250,000 people.

There are big expectations for the new iPhone, informally dubbed the iPhone 8 or iPhone X by industry watchers. Investors, betting the new phone will rejuvenate Apple’s sales after a recent slump, have pushed Apple’s share price to record highs in recent months.

The new device is expected to have a base price near $1,000—a significant premium over existing models—in part because of more expensive components. Analysts’ forecasts for initial shipments vary widely, with some projecting as many as five million units shipped in the last week or so of September.

The company said last month that it expects total revenue of $49 billion to $52 billion for the quarter ending Sept. 30, figures that exceeded some analysts’ estimates.
 
The production delays earlier this summer stemmed in part from Apple’s decision to build new phones using organic light-emitting diode, or OLED, screens similar to those used by rival Samsung Electronics Co. At the same time, Apple decided to ditch the physical home button that contains fingerprint sensors for unlocking the device. Apple tried to embed the Touch ID function, or fingerprint scanner, in the new display, which proved difficult, the people familiar with the process said.

As deadlines approached, Apple eventually abandoned the fingerprint scanner, the people said, and users will unlock the phone using either an old-fashioned password or what is expected to be a new facial-recognition feature. Nonetheless, precious time … (read more)

via WSJ

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: