iPhone 5 supplies will be limited
Short supplies of key iPhone 5 components -- especially a new display based on "in-cell" technology -- mean lower-than-expected shipments of the new handset, and fewer of new phones will be available when they go on sale, according to a brief post by DigiTimes.
As it usually does, DigiTimes based its post on anonymous "sources in the supply chain."
But what's confusing is the prediction that "new iPhone" shipments in Q3 will be fall to 15 million from a previous forecast of 20 million because of alleged shortages of new in-cell displays and of a redesigned, smaller dock connector: We're already in the third calendar quarter. And assuming the iPhone 5 is announced Sept. 12, and is available a week or so later, then its sales will be counted as part of calendar Q4.
Apparently, by "new iPhone" DigiTimes means current Q3 shipments of new-to-the-buyer iPhone 4S and other models: Investors and Apple itself have noted that sales for current iPhone models slow as consumers decide to wait for the next iPhone. But this current quarter drop-off therefore can't have anything to do with the purported low yield rates for components.
In-cell touch panels are a new technology for touch screens, which lets the manufacturer eliminate several of the layers in conventional displays. The result is a thinner device. Rumors have circulated for months that Apple will introduce the technology in the iPhone 5. DigiTimes also claims that the "recently redesigned" dock connector is also not being produced in enough quantities either. Rollup is not persuaded that Apple decided on a major redesign for a key iPhone 5 component only "recently."
But it's all pretty convincing to Eric Brown, at International Business Times, who seems fully prepared to accept that "rumors now are suggesting that production problems could limit Apple's supply of the new phone."
"[I]t certainly is possible that the [next] phone will be a little harder to find than normal," he intones, sounding less like a reporter or even a blogger and more like a palm reader. ("Yessss ... I see millions of iPhones in your future. But be warned! They may be a little harder to find than normal!")
DigiTimes' source, assuming one actually exists, may even be right -- at some point there may have been a problem, or likely more than one, in yields of this or that new iPhone component. But these rumors completely lack context, such as when did the yield problem occur? In any case, manufacturing and supply chain processes and schedules are designed to identify and then fix exactly these kinds of problems.
The Wall Street Journal reported this week that LG Display Co. CEO Han Sang-beom said the company has begun mass production of the in-cell panels, though he didn't say they're destined for iPhone 5. And he acknowledged there have been problems in the past.
"We had some hard times (in developing the new in-cell technology) at first ... but it seems those hard times have finally ended," Sang-beom told reporters. "The in-cell technology is the industry's latest development. (But) we will be able to supply the panels without any fail."
iPhone 5 will be bought by a whole lot of people
To put that into investor jargon, iPhone 5 "will see strong demand from consumers," according to a survey report by Robert W. Baird analyst William Power, as reported by Teresa Rivas at Forbes' Tech Trader Daily.
Baird got responses from 2,000 people though Rivas doesn't report much detail about the composition of the survey. Of the sample, 39% said they are now eligible for a phone upgrade on their cellular contract (another 6% will be eligible within three months). Of these eligible respondents, 45% said they plan to buy an iPhone and the "vast majority are waiting for the iPhone 5," writes Rivers. "The next biggest group, 31%, said that they were undecided on their next phone, and those planning to buy Google's Android devices rounded out the bottom at 22%."
Power's conclusion: "Those percentages, if they held, could suggest 50 million+ iPhone 5 sales in the U.S. alone, well above current forecasts."
In other words, a lot of people will buy the next iPhone. Let's face it: That's been true since the first iPhone was released in 2007 (though to be fair, Power's job is providing more technical guidance to investors, for whom accurate projections of sales bear on investment decisions).
Asymco's Horace Dideu has made several posts dealing with iPhone sales dynamics (first here and then here). A key element is the decision by fiercely loyal existing iPhone owners to eventually upgrade to a new iPhone model. Another is the decision facing feature phone users trying to decide on their first smartphone purchase.
Apple's strategy of offering older iPhone models at much lower prices has been one way of bringing in first-time smartphone buyers, and snagging their loyalty, turning them eventually into repeat buyers. Android is only now starting to face the loyalty test: As users come to the end of their first two-year contracts, will they stick with Android?
The fall of 2012, Dideu noted, is "when most early Android buyers will be looking for a new phone and when most iPhone 4 users (all 70 million of them) will be looking for a new iPhone. That would seem like a good time to introduce a new iPhone '5'."
iPhone 5 power cable, and smaller dock, revealed
Finally. We can stop holding our breath. And thank Twitter.
Salvador Rodriguez of the Los Angeles Times posted the admittedly skimpy details in a tweeted photo from a "Chinese electronics website," purporting to reveal the new, updated iPhone power cable with its new, updated and smaller dock connector.
You can see this technological marvel yourself.
The photo is from Veister.com, which has been repeatedly, even incessantly, retweeting the picture. "The picture is accompanied by the message 'For iphone5 USB cable Welcome visit veister.com,' but there's no official confirmation this is the real thing," Rodriguez writes. We guess he didn't ask any Asian supply chain sources.
"Though it isn't at all certain this image is of a real iPhone 5 charger cable, it is in line with rumors about the [redesigned] dock," Rodriguez declares. If you can't get official confirmation, having the rumor be "in line with" other rumors is almost as good.
Why else would an electronics website tweet a photo linked to one of the Web's most highly searched-on terms and by the way include a link to its own extensive catalog of consumer products? Oh. Wait ...
John Cox covers wireless networking and mobile computing for Network World. Twitter: http://twitter.com/johnwcoxnww Email: email@example.com Blog RSS feed: http://www.networkworld.com/community/blog/2989/feed
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