Most smartphones enter mass production a few months before they are officially unveiled. But the iPhone X production hasn’t started yet, even though Apple has announced the device and will start taking pre-orders on October 27. The phone is scheduled to go on sale on November 3. A new report from Raymond James analyst Christopher Caso indicates that you have incredibly slim chances of getting your hands on the iPhone X this year.

Apple iPhone X Production
Image Source: Apple.com (screenshot)

iPhone X production to start in mid-October

A few days ago, KGI Securities analyst Ming-Chi Kuo told investors that a large chunk of the iPhone X deliveries would be pushed back to 2018 due to production issues. The analyst blamed OLED panels for the delay. Kuo claimed Apple was able to make only 10,000 units of the iPhone X per day, which is far from sufficient to meet the massive consumer demand.

In a research note to investors (via Barron’s), Raymond James analyst Christopher Caso said Apple hasn’t yet started the iPhone X production. His supply chain checks suggest that the phone is facing more problems than just the OLED screens. The additional delays will affect Apple’s most expensive phone’s availability during the crucial holiday shopping season.

Supply chain sources told Caso that the iPhone X production would start in mid-October, just a few days before Apple starts accepting pre-orders. Some of the component orders were “firmed up as recently as last week.” It will shift the full production ramp up more into the December quarter. The production schedule is a month later than what analysts expected in August and two months later than the expectations in June.

iPhone X hurting the iPhone 8 sales

The iPhone X will witness a massive demand. Consumers so desperately want the 10th-anniversary iPhone that most of them are skipping the iPhone 8 and 8 Plus. Pre-orders for the iPhone 8 and 8 Plus have been far below expectations not only in the US but across the globe. Ming-Chi Kuo told investors that the iPhone X was cannibalizing the iPhone 8 sales, which would negatively affect Apple’s September quarter results.

When new iPhones go up for pre-orders, the shipping estimates tend to jump to 3-6 weeks due to strong demand. But the availability window is merely 1-2 weeks for the iPhone 8 and 8 Plus, pointed out Kuo. Separately, Rosenblatt Securities analyst Jun Zhang said the iPhone 8 pre-orders in China were much lower than the iPhone 7 and the iPhone 6.

According to Zhang, the iPhone 8 and 8 Plus received only 1.5 million pre-orders on JD.com in the first three days. Last year’s iPhone 7 and 7 Plus had received 3.5 million pre-orders on the Chinese site within the first three days. The iPhone 8 pre-orders on China Mobile were around one million units in the same period, much lower than 2.5 million units for the iPhone 7 and 3.5 million units for the iPhone 6.

The iPhone X is the most revolutionary smartphone to come out of Apple’s facility in several years. It is the first Apple-branded phone to feature a bezel-less OLED display. It has a dual camera on the back, and an improved front camera for selfies. Both the front and rear cameras support the Portrait Lighting feature. Face ID has replaced the Touch ID fingerprint sensor. The phone relies on gesture controls for navigation. It comes with wireless charging, fast-charging, and an A11 Bionic processor.

Delayed iPhone X production could force customers to switch to Android

If the iPhone X remains scarce during the holiday period, many potential buyers might switch to Android. November 3 is not too far away, but only a small number of lucky customers will be able to get their hands on the iPhone X during the holiday season. Bernstein analyst Toni Sacconaghi points out that consumer loyalty is high for Apple, but they may lose patience if the phone they were initially hoping to buy in September gets pushed back to 2018.

Sacconaghi says Android vendors such as Samsung, Google, and LG will have exciting new premium smartphones going into the holiday quarter. Samsung’s Galaxy Note 8 has hit the store shelves, so has the LG V30. Google’s next-gen Pixel 2 and Pixel 2 XL will be announced on October 4th. The Galaxy Note 8 has a more beautiful display than the iPhone X. It also supports Google Daydream VR, facial recognition, iris scanning, wireless charging, and has a dual camera.

$999 is ‘a value price’ for the iPhone X

There is a huge debate going on whether the iPhone X is worth its $999 starting price. The phone costs $1,149 for the 256GB model in the United States, though it goes up to $1,500 in countries such as Russia, India, and the UK. It’s the first iPhone to break the psychological barrier of $1,000. However, Apple CEO Tim Cook recently said in an interview that the iPhone X was actually a bargain.

During an interview with Good Morning America, the Apple CEO told the audience that $999 was “a value price” for the technology the iPhone X offers. He added that only a few people pay for the iPhones upfront. Most buyers take advantage of the iPhone Upgrade Program, trade-in offers, and carrier subsidies. The payment is spread over 12 or 24 months, which makes it easier for customers to purchase the device.

Cook said during the interview that the iPhones have become an essential part of our daily life. Users expect their iPhones to do more and more. As a result, the company has packed the device with more and more technologies to make it more useful. There is a reason the iPhone X costs $1,000, and that price tag might indeed be “a value price.”

Susquehanna International Group recently reported that the cost of the iPhone X components was more than twice that of the iPhone 7. While the iPhone 7’s component cost was $248, it is $581 for the 10th-anniversary iPhone. The component cost does not include the cost of assembly, employee salaries, R&D, marketing, advertising, administration, patent royalties, and others. Add these costs to the component cost, and you’ll realize that Apple isn’t going to earn huge profits on the iPhone X.