A report began circulating several days ago that Apple Inc. (NASDAQ:AAPL) may start production of the iPhone 8 early. Typically, when a company starts manufacturing sooner than usual, that points to an accelerated release date for a new product.
In this case, it seems unlikely the move will result in an iPhone release date before Apple’s standard September launch.
If not to get it on shelves sooner, why would the company want to get an early start on new iPhone production?
The iPhone 8 Early Production Ramp Up
Apple has a pretty standard roadmap when it comes to new iPhone releases. With a late September iPhone release date, the company starts to ramp up production of the new model in late summer. However, this year it looks as though Apple may be breaking with tradition.
According to a report from BlueFin Research Partners, there are indicators in the company’s supply chain that point to an unusually early production ramp up for the iPhone 8. Quoted in MSN Money, the BlueFin report notes:
“The most intriguing data points that we have uncovered suggests that Apple is ramping the next generation iPhones earlier than historical norms.”
Why Early Production Won’t Lead to an Earlier iPhone Release Date
Before anyone gets too excited about the possibility of an early iPhone 8 release, that scenario is highly unlikely.
First, ramping up production in June means Apple will begin having stock of the new iPhones in warehouses by the summer. But no one releases a flagship smartphone during the summer months — that’s a slow time for consumer technology news. People are on vacation and not only would an iPhone announcement not get the coverage Apple expects for its new product launches, with so many people away the line-ups at Apple Stores the company is hoping for wouldn’t happen.
An early release would also reduce iPhone 7 sales. Now that production is humming on that model, Apple wouldn’t want to kneecap it by releasing the iPhone 8 early.
So Why Would Apple Ramp up iPhone 8 Production Early?
It’s become increasingly obvious that companies like Apple are pushing the limits of their supply chain and manufacturing partners with their latest smartphones. The new dual camera system, haptic Home button and other components led to a shortage of some iPhone 7 models at launch. Apple ramped up production in late summer as usual, but these issues caused delays.
I preordered an iPhone 7 Plus, but still waited a month after the new iPhones went on sale before mine was available …
Then there’s the issue of batteries. Apple has had to face its own headaches with iPhone 6 and 6s batteries, but those problems pale in comparison to the nightmare rival Samsung Electronics Co Ltd (OTCMKTS:SSNLF) has gone through with the Galaxy Note 7 and its exploding batteries.
There’s a lot riding on the iPhone 8 and Apple appears to be throwing all sorts of new features, cutting-edge technology and a completely new design at its 10th anniversary iPhone. Glass construction, wireless charging, an OLED display, virtual Home button and more. The company is even rumored to be charging $1,000-plus for its new flagship, an unprecedented price for a smartphone.
In addition, Samsung will likely be introducing its new Galaxy Note around the same time, and pulling out all the stops to make that phablet such a smash hit that everyone forgets about the Galaxy Note 7. Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) is also expected to release the followup to the worryingly successful Google Pixel Phone in the fall.
Rather than ramping up for an early launch, it’s far more likely that Apple is starting iPhone 8 production early in order to iron out all the manufacturing bugs early. Virtually all of the components will be new and Apple will undoubtedly be pushing the limits of manufacturing capability. Having an early start will ensure any issues are caught well before the iPhone 8 goes on sale, ensuring a smooth, scandal-free, launch. And no embarrassing issues for the competition to take advantage of.
The early ramp up also ensures that even if things don’t go smoothly at first, there will be plenty of iPhone 8 smartphones sitting in Apple warehouses in September, ensuring a record-setting launch.
Despite the apparent early production ramp up, don’t expect an iPhone release date in the summer. But Apple’s move does mean you should have a flawless iPhone 8 in your hands at the launch, instead of waiting weeks or months for supply to catch up to demand.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.