Company asks suppliers to manufacture between 70m and 80m units combined of two large-screen iPhones with 4.7-inch and 5.5-inch displays by December 30
Apple is preparing for its largest initial production run of iPhones, betting that larger-screen models will lure consumers now attracted to similar phones from Samsung and others.
The Cupertino company is asking suppliers to manufacture between 70 million and 80 million units combined of two large-screen iPhones with 4.7-inch and 5.5-inch displays by December 30, according to sources. Its forecast for what is commonly called the iPhone 6 is significantly larger than the initial order last year of between 50 million and 60 million versions of the iPhone 5S and 5C — which had a display measuring 4-inches diagonally, the sources said. Both of the coming models are expected to feature metal cases similar to the iPhone 5S and are likely to come in multiple colours.
Apple stuck with smaller displays on iPhones even as rival smartphone makers rolled out bigger screens and customers clamoured for larger phones. Demand for larger-screen smartphones boosted Samsung, which started offering a 4.8-inch display in its Samsung Galaxy S models in 2012 and introduced an array of bigger phones.
Apple is scheduled to report its fiscal third-quarter results overnight and provide a financial outlook for the current period ending September 28. Historically, Apple has released a new iPhone in mid-September.
Analysts are forecasting Apple will report sales of about 35.9 million iPhone units for the three months ended June 30. That would be up about 15 per cent from a year earlier.
One possible hiccup with the larger screen is that display makers for the new iPhones are struggling to improve the production of the larger 5.5-inch screens. The production is complicated because the displays are using in-cell technology, which allows the screens to be thinner and lighter by integrating touch sensors into the liquid crystal display and making it unnecessary to have a separate touchscreen layer.
To factor in the possibility of a higher failure rate for displays, Apple has asked component makers to prepare for up to 120 million iPhones by year-end, the sources said. It made a similar request last year to prepare enough parts for a combined 90 million iPhones to provide some slack in its supply chain. The 5.5-inch iPhone screen would face an additional manufacturing complication if it uses a cover using sapphire crystal, a more durable but costly alternative to glass.
Apple’s iPhone production forecast assumes a surge in demand from Apple’s partnership with China Mobile, the world’s largest carrier, which started offering the iPhone this year. Bigger-screen smartphones are popular in China and other emerging markets where the smartphone is replacing the personal computer.
As Apple competes against Google’s Android operating system, larger screens are common in Apple’s core mobile market — high-price phones. In May, 98 per cent of Android smartphones sold globally at the equivalent of $US400 ($426) or above featured a display greater than five inches.
