DigiTimes, citing a report from Economic Daily News, says evidence is mounting that Apple‘s (NASDAQ:AAPL) upcoming premium OLED iPhone 8 might not launch in September. Instead, thanks to “technical issues related to the lamination process of curved OLED panels,” as well as “the adoption of a 3D sensing system,” could cause the new phones to arrive in either October or November.
DigiTimes further goes on to note, once again citing the Economic Daily News report, that “market sources” are keeping an eye out for “the pull-in for passive components from the iPhone’s supply chain to see whether production of the new devices is on track.”
What if the new iPhone is delayed?
Given that the upcoming OLED iPhone is seemingly shaping up to be a technical tour de force, it’s probably not too far-fetched to believe that the new device could be delayed. After all, the new technology Apple is bringing to this device is clearly difficult to build, and considering the demand that Apple is reportedly expecting for this new model, Apple probably isn’t going to want to launch this new device until it can prepare a lot of them for initial shipment.
The bad news — if the launch of the new device is delayed — is that Apple clearly won’t begin recognizing revenue for its newest phones as early as it has in previous years. That could make year-over-year comparisons a bit messy.
Remember, Apple tends to ship some next-generation iPhone models at the end of the fourth quarter of a given fiscal year, with most of the initial sales rush happening in the first quarter of the following fiscal year.
If the launch of the iPhone 8 is pushed out into, say, October, then the fourth quarter of the current fiscal year might come in a little lighter than many expect, but then the first quarter of the following fiscal year could be more robust than what one would typically expect.
Things could get quite messy, though, if Apple doesn’t launch the new OLED iPhone until sometime in November. Not only would initial revenue that would have been recognized at the tail end of the current fiscal year be pushed out, but a substantial amount of revenue that would have been recognized in the first quarter of the following fiscal year, typically Apple’s peak quarter, would be pushed out, too.
That could really mess with Apple’s seasonal revenue trends.
Moreover, if Apple is late to getting its new OLED iPhone out, then that could lead potential buyers of the new phone to opt for alternative devices with, perhaps, similar feature sets.
What Apple needs to do
If Apple won’t be able to ship the new OLED iPhone in serious quantities until October or November, it should still announce it and take pre-orders for it when the other iPhone models — presumably called the iPhone 7s and iPhone 7s Plus — go up for sale.
Taking pre-orders probably wouldn’t change the dynamics of any revenue push out, but it could serve to stem any potential order losses to competing devices resulting from the push-out, and it would help prevent potential customers from just buying one of the cheaper iPhone models, negatively affecting Apple’s product mix.
Delays aren’t ideal, but in this case they wouldn’t be the end of the world. Building state-of-the-art devices in mass quantities isn’t easy, but as long as the company has a killer product on its hands and as long as it lets customers pre-order it ahead of mass availability, everything should work out all right.