Various analysts and leakers have pointed to delays in production due to difficulty integrating the Touch ID sensor under the display. KGI Securities analyst Ming-Chi Kuo has issued a new research note which suggests that production could be delayed to October-November, deferring demand until next year. As long as the iPhone 8 lives up to the hype, the delay 'won't undermine actual demand'.
Production ramp up of OLED iPhone could be delayed to October-November (previously estimated to be August-September, as in previous years). That said, if new features, such as 3D sensing, can provide good user experience, a temporary supply shortfall won’t undermine actual demand, which may be deferred to 1H18. In that case, potential contribution starting late-2Q17 from OLED iPhone could be partially delayed by 3-6 months for related suppliers.
Apple competitors including Samsung, Huawei, OPPO, Vivo, and Xiaomi are all preparing to launch 'high-end full-screen smartphones' this year which could impact the iPhone 7s models making them less appealing. Consequently, Kuo has adjusted shipping estimates to take the iPhone 8 delay into account.
As a worst case scenario, Kuo believes iPhone shipments could decrease by 15 to 20% resulting in 80 to 90 million units shipped versus a previous estimate of 100 to 11 million units. "We see a higher probability of the worst case scenario coming to pass," writes Kuo.
While we believe the announcement and launch time of the new iPhones will be similar to previous ones, production ramp up of OLED iPhone could be delayed to as late as October-November compared to the usual ramp up period of August-September, due to increased production difficulty. In other words, severe supply shortages may persist for a while after the new models are launched, capping total shipments of new iPhones in 2H17.
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