AAPL stock is sliding this afternoon as The Wall Street Journal reports the new iPhone is said to have seen “production glitches.”
Apple Inc.’s new iPhone, which is expected to be unveiled Tuesday, was plagued by production glitches early in the manufacturing process this summer, according to people familiar with the situation, which could result in extended supply shortfalls and shipping delays when customers start ordering the device later this month. New iPhones are typically in short supply when first released. But if shortfalls of the new phone extend beyond the initial sales period, which is expected to begin September 22, they could weaken analysts’ and investors’ projections for sales in the crucial holiday period.
The production glitches led to a setback of about a month in the manufacturing timetable. Foxconn Technology Group, the Apple contractor that assembles iPhones, has been ramping up production at its manufacturing complex in Zhengzhou, China. The company is paying bonuses to employees who can help bring new hires on board at its Zhengzhou plant, which Foxconn said in June employs about 250,000 people.
Ironically, this was predicted three months ago by Citi analyst Jim Suva who warned that “based on industry-wide checks, we believe the significant enhancements to the iPhone 8 OLED could experience delays as it ramps to high volume production in order to meet strong demand” and as a result slashed his September iPhone delivery estimate from 47 million to 40 million.
Of course, having ignored the news in June, the stock is acting quite surprised now that the exact same story is back in the headlines.
On the other hand, who knows: this could all be just another clever AAPL PR move to create scarcity and buzz ahead of the looming launch.