There have been persistent rumors that Apple's (NASDAQ: AAPL) upcoming iPhone 8, because of its complexity, won't be available in reasonable quantities until well after the formal unveiling expected to take place in September.
Though Apple is highly unlikely to say anything about the upcoming iPhone until it formally launches it, comments made on Apple supplier Broadcom's (NASDAQ: AVGO) most recent earnings call appear to confirm the rumors that the iPhone 8 will, indeed, be delayed.
Image source: Apple.
Straight from a supplier's mouth
Broadcom CEO Hock Tan said the company expects seasonal growth in its wireless-chip business "driven by the start of a ramp from [a] large North American smartphone customer as they transition to the next-generation platform."
That "large North American smartphone customer" is, of course, Apple.
However, Tan tempers investor expectations a bit by saying that the ramp-up of shipments in support of the next iPhone "appear slower this year" relative to what the company saw in the prior year.
"But we believe this will likely accelerate in the fourth quarter," Tan added.
Now, these comments could be construed as a signal from Apple to Broadcom that the former's initial iPhone build plans are lower this year than they were last year. That runs contrary to common sense, given the broad expectations of a radical change in form factor and addition of features, and Tan added additional color that shoots down that hypothesis.
The year-over-year weakness in the ramp-up in support of the iPhone 7, Tan said, is due to "timing."
"I think, it is timing and last year, the similar ramp was earlier — was stronger in Q3 probably because it was earlier," the executive continued. "And here the initial volume in our fiscal Q2 was smaller, made up with content on our side, but definitely Q4 is forecasted to be larger."
Later, but not that late
From the commentary on Broadcom's earnings call, it's clear that the production ramp-up of Apple's new iPhones is certainly pushed out a bit relative to what last year's production ramp-up looked like.
However, I think Broadcom's commentary about seeing some shipments in its current fiscal third quarter, coupled with its expectations for a substantial increase in unit shipments in Q4, seem to suggest that the gloom-and-doom reports might not be totally accurate that the new iPhone won't be available in serious quantities until the first calendar quarter of 2018.
In any event, what matters is that when Apple launches its new iPhone models, those phones offer compelling hardware improvements over prior-generation iPhones. The included software has to work well and take ample advantage of the hardware. And the phones have to be manufactured at reasonable yield rates.
If Apple has to push out the mass availability of the new phones by a month or two to meet those goals, then that's not a perfect solution, but it's still much better than shipping a compromised or unprofitable product.
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