Apple May Be Forced Into Staggered Release for New iPhones … Again

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New iPhones - Apple May Be Forced Into Staggered Release for New iPhones … Again

Source: Apple

Last year was supposed to be a record-shattering iPhone upgrade “super cycle” launch for Apple (NASDAQ:APPL). That didn’t quite happen, and a big part of last fall’s letdown was a staggered release because the iPhone X was delayed. This year was supposed to be different now that TrueDepth camera manufacturing challenges are smoothed out. However, a new report claims that once again, Apple will face a staggered release for its new iPhones.

What could make things worse for AAPL stock is that this year, the affordable model may not be available until November.

One of Apple’s New iPhones Could Be Delayed

It has been pretty clear from reading the tea leaves that Apple is doing everything possible to make 2018 the year that 2017 wasn’t, at least in terms of new iPhones. Last year, things just didn’t turn out the way they were supposed to. The iPhone X was expensive and delayed. The combination meant launch weekend numbers didn’t meet expectations. And iPhone sales for Q1 — traditionally the company’s strongest quarter as consumers snap up the latest offerings — actually fell by 1%.

This year, all signs have pointed to the company making big moves to address all the shortcomings of 2017. The expectation has been for three new iPhones: the followup to the iPhone X, a new iPhone X Plus and a lower-cost iPhone X lookalike with a larger, LCD display instead of OLED.

This model in particular is critical, as it gives iPhone X looks and capabilities, while avoiding the sticker shock of 2017. Apple is even predicted to pull out the tried and true strategy of splashing that entry level LCD iPhone with new color options to help goose sales.

However a new report suggests manufacturing issues could once again derail Apple’s launch plans for the new iPhones. And this time, the issue appears to be the low-cost LCD iPhone.

According to Mac Otakara (via Cult of Mac), AAPL chose Japan Display (OTCMKTS:JNNDF) and its FULL ACTIVE technology for the low cost, new iPhone’s LCD display. This move has the advantage of minimizing bezels, making the entry level iPhone closer in appearance to the iPhone X without the cost of an OLED panel.

But … Japan Display seems to be having production challenges and as a result, the new low cost iPhones could be delayed into November.

Potential Impact on New iPhone Sales and AAPL Stock

Any time new iPhones are delayed, it’s bad news for Apple and for APPL stock. The company can’t sell what it doesn’t have. That cuts into the Q4 earnings, which reflect the big launch weekend and the first few weeks of sales. It can also impact Q1, which is the first quarter where new iPhones are fully available.

Last year, that pattern was seriously scrambled because the flagship iPhone X wasn’t in stores until the start of November, with constrained supplies for much of that month.

If Mac Otakara’s report is correct, and new iPhones are once again delayed until November, it could be even worse this time around. Because this year it’s the affordable option that has being delayed –the iPhone that was supposed to help goose volume sales again for the company. If it’s not on Apple store shelves when the new iPhone X models launch, the opening weekend numbers could be bad. Last year, impatient iPhone X fans could shrug, buy the iPhone 8 Plus instead and end up saving a lot of cash. Someone who wants to buy a new lower cost iPhone may find an iPhone X is simply too expensive, making it more likely they’ll hold off.

That raises the specter of AAPL stock having a rough ride when Q4 2018 earnings are released. And if the delay extends into November with low availability — as happened with the iPhone X last year — the impact is also felt in Q1, which is traditionally Apple’s strongest quarter.

Stay tuned for developments on this one. Apple is going to be doing everything possible to avoid a repeat of last year’s staggered release of new iPhones. It’s possible that the company’s engineers and Japan Display will get any issues with the new displays resolved in time to avoid the scenario. But if not, be prepared for a potential rough ride for AAPL stock in Q4 and possibly even Q1 2019.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


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Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


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