Several published reports are indicating that Apple’s supply chain is now gearing-up for the release of the new family of iPhone models later this year.

Asia based DigiTimes recently reported that semiconductor fab producer TSMC has received orders from Apple for production of the next generation 10nm A11 processor chip that will be included in the new models. The report cites sources as indicating that production was once affected by issues involving stacking components in the backend integrated fan-out packaging process, but have subsequently been resolved. The open question is when TSMC will be able to support full-scale chip production. Citi analyst Roland Shu has indicated that volume production is expected by July.

The South China Morning Post reports that Foxconn has been designated by Apple to be the sole contract manufacturer for the planned top-of-line model also due out  later this year. This most expensive and full-featured iPhone Pro model is reported my multiple sources to include a 5.8-inch light-emitting diode (OLED) touch screen, 3D facial recognition, front and back glass casing and augmented reality applications. There are indications that the Pro model could retail in the $1000 range.  According to the report, Foxconn was selected as prime manufacturer for the Pro because of its demonstrated experience in this CM’s ability to ramp-up Apple’s more complex new products.

The MacRumors site features a chronicle of all three of the rumored iPhone 8 models, including features and functions.

Other CM’s mentioned for the other planned model variations are Pegatron and Wistron respectively.  Supply Chain Matters is of the belief that this upcoming iPhone 8 model cycle will the largest test to-date of Apple’s supply chain segmentation strategy, specifically the three CM’s and the suppliers feeding component parts.

Other suppliers mentioned in the report include:

  • Samsung Electronics for the OLED panels.
  • Sharp and JDI for LCD panels.
  • AAC Technologies for miniature acoustic systems.
  • ASM Pacific Technology for the alignment bonding system used on camera modules.
  • Luxshare Precision Industry for wireless charging componentry.
  • Corning for glass screens.

 

Given the current streaming information, it would appear that product design has been solidified and the iPhone supply chain is now engaged for manufacturing ramp-up activities.

From our Supply Chain Matters lens, one thing is certain, Apple’s Sales and Operations and supply chain planning teams are going to be very busy in the coming months. If all goes according to plan, the 10th Anniversary of the iPhone will wow aficionados with one of the most expensive and full-featured devices to-date, along with other models at different price points. If any of the usual hiccups or snafus occur, teams will perform their usual response plans to ensure that global channel available meets plan. The biggest challenge will be in planning the proper model-mix plans among all planned three models.  During the last holiday season, the premium iPhone 7 Plus became supply constrained because planners did not initially plan for the actual demand for the full-featured, more expensive model. This year, the stakes are higher, along with the ability to gage and sense expected consumer demand.

It will all be fascinating to observe.

Bob Ferrari

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