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Apple iPhone 7 Is Reportedly Facing Supply Shortage Due To Low Yield Issues Affecting The New Dual-Camera Module

By Ershad Kaleebullah
Published on: 06:34 PST, Aug 27, 2016

It looks like the Apple is contending with a major issue with the iPhone 7. As the launch date of the iPhone 7 draws closer and production is being ramped, the Nikkei Asian Review has a report that states Apple is trying to contend with supply shortages for certain parts of the iPhone 7, due to problems with faulty components.

An industry source told the Nikkei Asian Review,“If Apple sticks to its launch schedule from last year, there may not be enough supply at the beginning, as some suppliers are still trying to fix low yield rates of their components.” The iPhone 6s and the iPhone 6s Plus were launched on September 9 last year, and Apple rolled out the devices in 12 regions on September 25.

The yield rate is actually a measure of the number of saleable units that a manufacturer gets after the final cycle of the production process — in this case, how many saleable iPhone 7s Apple gets at the end of production and right before launch. So, if the yield is low, then the manufacturer will have to ship lower volumes of the product or raise the price.

Jeff Pu, an analyst at Yuanta Investment Consulting, also confirmed this issue plaguing the iPhone 7 production. In fact, Pu has cut down his forecast for the production. Now he predicts that Apple will only produce 114 million iPhones, including both new and old models, in the July-December period, as opposed to the 120 million that he had predicted earlier. He claims that the problem is with the low yield issues affecting two components widely rumored to be a part of the iPhone 7, the waterproof speaker and the dual-camera module, which are yet to be resolved.

Pu wrote, “We estimate total iPhone 7 builds to be 74 million in 2H16F, compared to 84 million for iPhone 6s in 2H15. Together with pricing pressure, we expect most Apple food chain suppliers to see (year-on-year) revenue decline for the rest of the year.”

The Nikkei Asian Review report further states that the demand for premium handsets is weak and Apple might have a hard time selling the new iPhone to potential buyers. Incidentally, Apple has had two straight bad quarters where it saw its revenue drop for the first time in 13 years.

However, the number that matters is how many units of the Apple iPhone 7 will the company sell in the first week of its launch. Last year, it sold 13 million units of the iPhone 6s in the first three days after its launch. The sales figures for the first week could give us a clear indication of the future sales of the iPhone 7 and what is the general reaction to the product.

Earlier this week, we had reported about two fresh leaks surrounding the iPhone 7. In one leak, a famous Taiwanese pop star, Jimmy Lin, was photographed with what looked like the iPhone 7 Plus. Moreover, popular tipster Evan Blass categorically confirmed that the retail release date of the next iPhones will be on September 16.

Also, Steve Wozniak, Apple’s co-founder, stated that he was concerned about the iPhone 7 without a headphone jack. Talking to the Australian Financial Review he said the following.

“If it’s missing the 3.5mm earphone jack, that’s going to tick off a lot of people. I would not use Bluetooth. I don’t like wireless. If there’s a Bluetooth 2 that has higher bandwidth and better quality, that sounds like real music, I would use it. I have cars where you can plug in the music, or go through Bluetooth, and Bluetooth just sounds so flat for the same music. I have earphones with custom ear implants, they fit in so comfortably, I can sleep on them and everything. And they only come out with one kind of jack, so I’ll have to go through an adaptor. If there’s a Bluetooth 2 that has higher bandwidth and better quality, that sounds like real music, I would use it. But we’ll see. Apple is good at moving towards the future, and I like to follow that.”

All said and done, we will have to wait for Apple to officially launch the Apple iPhone 7, which is mostly likely going to be on September 9.

[Photo by Carl Court/Getty Images]

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