We’ve heard rumors before about the possibility of an iPhone 8 launch delay, but those concerns were alleviated for a time. Unfortunately for those who can’t wait to get Apple’s first phone with an OLED display, we’ve just heard a fresh report about a potential iPhone 8 launch delay.
iPhone 8 launch delay of three to four weeks
Bank of America Merrill Lynch analyst Wamsi Mohan said in a note to investors dated July 12 that his checks point to an iPhone 8 launch delay of three or four weeks. He cited supply chains checks during his last trip to Asia, and the problems he was told about appear to match up with what we’ve heard from other sources.
He still expects Apple to reveal all three new iPhones this year at the same time. Like pretty much everyone else, he’s expecting a 4.7-inch iPhone 7s with LCD screen, a 5.5-inch iPhone 7s Plus with LCD display and an OLED-equipped iPhone 8. However, his supply chain sources indicated that the iPhone 8 will be shipped about three to four weeks after shipping for the iPhone 7s and 7s Plus begins due to a number of problems with production.
iPhone 8 cycle to be longer than usual, although some disagree
Because he expects there to be an iPhone 8 launch delay, he slashed his iPhone unit estimates for the September and December quarters and increased his unit estimate for the March quarter. He continues to rate Apple stock as a Buy with a $180 price objective despite the shipping delay, although he warned that the shares could be a bit weak in the near term due to that delay.
He expects the iPhone 8 to be a “super long cycle” with higher average selling prices. Deutsche Bank analyst Sherri Scribner disagrees with this view, as she said in a recent note that the iPhone 8 “supercycle” is probably just a cycle, as the real supercycle was the iPhone 6 cycle.
He also sees the potential for sizable cash repatriation, resulting in various options for Apple to choose from, such as increased capital returns or acquisitions.
Here’s why there could be an iPhone 8 launch delay
The BAML analyst also described the problems his supply chain sources mentioned in connection with the report of an iPhone 8 launch delay. He said that at first, Samsung was having issues with the lamination process for the OLED displays, but his sources said it appears that the problem has been resolved. Other issues still remain, however.
One is removing the Home button and embedding the fingerprint sensor under the OLED display. There have been reports that Apple and its suppliers were having issues with this for quite some time, but since the first report of it, all the other reports about it have been all over the place. Some indicated that the problem had been resolved and the iPhone 8 will indeed have a fingerprint sensor embedded under the display. Then others said the problems were still occurring, still others said they were resolved, and a patent pointed to an alternative location for the sensor. So it’s anyone’s guess what will happen with the fingerprint sensor.
The other problem Mohan’s sources told him about is an issue with the packaging for the 3D sensor and low yields. The good news is that they told him that the fingerprint and 3D sensor problems will likely all be resolved by the end of August, but the bad news is that this could point to an iPhone 8 launch delay.