Apple Has an iPhone 8 Problem – Fortune

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Apple is reportedly planning three new iPhones for later this year—but one of them may be in trouble.

Over the last several days, several news reports have suggested that the iPhone 8, the unofficial name used to describe Apple's next big smartphone, could be delayed. Those reports suggest the company is facing problems in its supply chain and technical troubles with critical features like a fingerprint sensor integrated into the display. All the while, Apple is said to be pressuring its suppliers and employees to get the phone ready in time for an as-yet-announced September unveiling.

But Apple's week wasn't just dominated by iPhone news. Use of the company's virtual personal assistant Siri has fallen in the last year, according to a report, and Apple has made a big change to how customers pay for apps and music through digital services like its App Store.

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  1. Apple's iPhone 8 may have a fingerprint sensor built directly into its screen. However, KeyBank Capital Markets analyst Andy Hargreaves told investors in a note this week that the fingerprint sensor isn't working properly, and that Apple's supplier partners are scrambling to get it to work. He said that Apple and its suppliers have only a few weeks to fix the problem or face the possibility of delaying the handset's release. Apple may also opt to remove the fingerprint sensor altogether and instead rely on a face-scanning feature to verify purchases and to let users access the smartphone's software.
  2. Bank of America Merrill Lynch analysts Wamsi Mohan and Stefano Pascale followed that report this week with a note of their own, claiming Apple's iPhone 8 could be delayed for three to four weeks. The analysts, who visited companies in Apple's supply chain, said that Apple is "working through" problems with the fingerprint sensor and 3-D face-scanner. Again, the analysts said Apple and its suppliers are working to fix the problems before it's too late.
  3. Apple unveiled new back to school deals for students, educators, and parents. Customers who buy an iMac, Mac Pro, MacBook, MacBook Pro, or MacBook Air through the program will receive their choice of a free pair of Beats Sol3, Powerbeats3, or BeatsX headphones. Apple is offering a 50% discount to students, parents, and educators on Beats Solo3 headphones with the purchase of an iPad Pro.
  4. Apple has made it possible to use PayPal in its App Store, iBookstore, and iTunes store. The feature will allow users to enter their PayPal credentials to make a payment rather than a credit card, debit card, or gift card. The feature is available in the U.S., Mexico, Canada, and several European countries.
  5. Between May 2016 and May 2016, Apple's virtual personal assistant Siri lost 7.3 million monthly users, or about 15% of its total U.S. user base, according to data from researcher Verto analytics. However, at 41.4 million monthly unique users, Siri is the most popular virtual personal assistant.
  6. Apple has taken its fight with graphics maker Imagination Technologies to another level by opening a 22,500-square-foot office just minutes from Imagination's headquarters in London. While Apple hasn't acknowledged the move, it's viewed as a shot over Imagination's bow, and an attempt by the iPhone maker to attract Imagination employees for its own graphics efforts. Apple and Imagination are embroiled in a legal spat following the iPhone maker's decision to stop sourcing graphics technology for its iPhones from Imagination. Since then, Imagination's shares have plummeted and the company is for sale.

One more thing…Apple announced this week that it's building a data center in China. The move will allow it to comply with a new Chinese law that requires all foreign companies wanting to do business there to open data centers in the country so they can store user data there.

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