WSJ: Apple has pushed the 5G iPhones back by about a month

An early morning report on WSJ.com specifies three sizes for this fall’s release: 5.4 inches, 6.1 inches and 6.7 inches.

From “Apple Delays Mass Production of 2020 Flagship iPhones”:

Apple is pushing back the production ramp-up of its flagship iPhones coming later this year by about a month, according to people familiar with the changes, as the coronavirus pandemic weakens global consumer demand and disrupts manufacturing across Asia, the heart of the consumer electronics supply chain.

Apple is forging ahead with plans to release four new iPhone models later this year, people familiar with its plans say. The phones, some with 5G connectivity, will vary in price and come in three sizes—5.4 inches, two measuring 6.1 inches, and one at 6.7 inches, all featuring organic light-emitting diode, or OLED, screens, the people said…

Apple is slashing the number of handsets that it plans to make in the second half of this year by as much as 20%, one of the people said. It isn’t clear whether the slashed amount for 2020 would be pushed back into 2021 for manufacturing.

My take: This is news? Bloomberg and Nikkei Asian Review have been feeding us 5G iPhone delays stories for more than month.

See also: 5G iPhone delay? The message from Apple’s supply chain is mixed

6 Comments

  1. Fred Stein said:
    News? No really.

    It is timed shortly before earnings report, perhaps to set up questions that Apple will not answer. The most polite comment on WSJ article; “rookie journalism.”

    5
    April 27, 2020
  2. Gregg Thurman said:
    Let’s assume, for a moment, that weekly production capacity remains constant going forward, as it has been for the past several years at about 4100 units per week.

    Then let’s assume that the new iPhone SE is going to be very successful for multiple reasons: addressing a very large (and growing) base of 3 year and older iPhones, and enticing Android users to join the Apple ecosystem.

    With a production capacity of about 4100 units per week the introduction of a new (highly popular) variant is going to negatively impact production capacity historically reserved for annual upgrades of flagship iPhones.

    Is this a bad thing? Not if the point of the iPhone SE is to enlarge the base of buyers for Air Pods, Apple Watches, AppleTV+, Apple Music, Apple Arcade. Any dip in iPhone ASP would be more than offset by increased ARPU derived from Services and Wearables (each boasting much higher GM%).

    Services and Wearables are Apple’s current growth engines. I believe the point of the iPhone SE is to further increase adoption of Apple’s Services and Wearables products by stagnant users of legacy iPhones and higher end Android users. Remember Apple products are aspirational.

    A delay, of any amount, in commencing shipment of “iPhone 12s” in order to satisfy demand for iPhone SE only furthers Apple’s strategy to expand Services and Wearables high margin revenue. Besides, those wanting a 5G iPhone aren’t going to jump ship over a month “delay”.

    Articles like this may be accurate, but they don’t properly address the reasoning behind the decisions to delay.

    It’s what I would do if I were Tim Cook.

    4
    April 27, 2020
  3. Jerry Doyle said:
    “…. My take: This is news? Bloomberg and Nikkei Asian Review have been feeding us 5G iPhone delays stories for more than a month.”

    Agree! Exactly what I thought when I read the media announcements early this morning. What does this news article have to do with already known information except as brother Fred denotes, to cloud further Thursdays’s earnings call with extraneous minutiae to reflect badly on Apple. Ain’t gonna happen.

    Apple is going to report more than favorable information and data Thursday than what many analysts and others on WS never expected to hear. I also expect Tim Cook to give some form of forward guidance in view of his projected V-shape recovery. If Tim indeed sees a V-shape recovery, then he indeed is in a position of giving some form of forward guidance.

    2
    April 27, 2020
    • Ralph McDarmont said:
      I agree. Tim knows plenty about supply and production. I feel confident he has been on top of this very weird virus and trade war situation. We will know much more in a few days.

      2
      April 27, 2020
      • Jacob Feenstra said:
        Right. And Tim also knows that true 5G infrastructure won’t really be in place until 2022. I was just reading about the 5G rollout in the Netherlands: the first few years it will use the 4G infrastructure—optimizing it at best some 10%. The true speed capabilities of 5G will not be leverage. It’s like buying a a car with a 750hp engine… that can only drive on country lanes where the maximum speed is 40 mph. So why have it?

        1
        April 28, 2020
  4. Robert Stack said:
    Jerry: I agree with your take except for this part: “I also expect Tim Cook to give some form of forward guidance in view of his projected V-shape recovery.” As best I can tell, Tim Cook was not the one on record saying that…

    1
    April 28, 2020

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