iPhone X Supply Is Going to Be Tight

Wednesday, 27 September 2017

Debby Wu, reporting for Nikkei Asian Review:

Two executives working for iPhone suppliers told Nikkei Asian Review that makers of 3-D sensor parts are still struggling to reach a satisfactory level of output, and to boost their yield rate. […] Both sources were unable to offer clarity on whether Apple could meet demand after launch of the iPhone X. One said the phone was being produced in small quantities, around tens of thousands daily.

Jeff Pu, an analyst at Taipei-based Yuanta Investment Consulting, also identified the 3-D sensors as the only major issue remaining. […] According to Pu’s estimate, Foxconn churned out 2 million units of the iPhone X in September, and in October that number should rise to 10 million. He said that Foxconn will have assembled a total of 40 million iPhone X phones by year-end, lower than his estimate of 45 million earlier this year.

“Supply will still be tight after Nov. 3,” Pu noted.

This should come as no surprise. When an Apple product is late, supply is constrained when it ships. The two go hand-in-hand. AirPods didn’t ship until December last year, and they were deliverable in “4-6 weeks” until earlier this month. Apple Watch shipped late, and supply was severely constrained for months.

This makes pre-ordering iPhone X a bit of a gamble. I do not know when Apple is going to seed review units of iPhone X. My guess, though, based on how they’ve seeded review units in the past, is that they’ll go out the week before pre-orders begin. The dates Apple has announced are Friday October 27 for pre-orders, and Friday November 3 for “available”. So my guess is that review units will go out on October 23 or 24 (Monday or Tuesday). But the embargo on reviews will probably end Monday or Tuesday the next week, October 30 or 31 — after pre-orders begin.¹

If supplies are going to be severely constrained, that means you’ll have to place your pre-order Thursday night at midnight PT (3 am here on the east coast) if you want it delivered any time soon. I think it’s going to be the case that you’ll have to get lucky and get your order in within the first few minutes of it going on sale to get yours on November 3. Within minutes, I’ll bet shipping dates will slip to December. If you wait until you read the reviews the next week, you might be waiting until January for delivery.²

The embargo date for reviews has always come after pre-orders begin in my experience, and I don’t think that will change for iPhone X. But with iPhone X, I think people are a little bit more on the fence because so much is new. Does Face ID really work so well that you won’t miss Touch ID? Is the swipe from bottom gesture really a good replacement for the home button? Is moving Control Center from the bottom to the top right corner a good idea (especially on a 5.8-inch display)? Has Apple really made an OLED display with the color accuracy we expect from an Apple product? Personally, I’d like answers to all these questions before I order one. If the answer to any of these questions is no, it’s a problem. If the answer to several of these questions is no, it’s a disaster. I don’t think that’s likely, but it’s within the realm of possibility.

The reviews of iPhone X will be the most anticipated since the reviews of the original iPhone in 2007.³ But if you want an iPhone X before 2018, I suspect you’re going to have to pre-order before you read them. This won’t be that much of a gamble though: if you pre-order and the subsequent reviews give you pause, you should be able to cancel your order.

The smarter move, though, might be to let the phone ship anyway and resell it. However the reviews turn out, the gray market for iPhone X is going to be insane.