iPhone 8 Leak ‘Confirms’ Apple’s Biggest Problems

iPhone 8 will look fantastic and all signs point to it being a runaway success, even if it costs the earth. But Apple AAPL +0.81% does have problems with its biggest redesign yet and they were just confirmed…

Predictably the source is acclaimed Apple insider KGI Securities’ Ming-Chi Kuo and in a new report obtained by MacRumors he has confirmed Apple faces both supply chain problems and design restrictions.

The iPhone 8’s OLED display and ‘cut-out’ notch are causing delays
Let’s break them down:

Supply Chain Problems

Perhaps the biggest thorn in Apple’s side with the iPhone 8 is its headline feature: the switch an enlarged OLED display. And Kuo states this will cause a record supply deficit at launch.

“The OLED version will be in short supply as we forecast shipments in 3Q17 will be 2-4mn units or less. We do not think production of the OLED iPhone will pick up substantially before 4Q17; and given strong demand, tight supply may persist until 1Q18 before improving much.”

To put this in context, Apple sold 41M iPhones in Q3 2017 and the newly released iPhone 7 and iPhone 7 Plus accounted for almost 25M of them despite only being on sale for a few weeks.

Given the iPhone 8 is the first dramatic redesign of the iPhone in three generations, limiting it to 2-4M units could cause chaos. Furthermore Apple sold over 45M iPhones in Q4 2016 so if stock remains heavily restricted until Q1 2018 as Kuo predicts, then the crucial Christmas period is under threat.

The good news is Kuo states the iPhone 8 will launch at the same time as the cheaper, more incremental iPhone 7S and iPhone 7S Plus.

My tip: if you do manage to get an iPhone 8 before Christmas, the most sensible thing would be to auction it!

iPhone 8 Design Limitations
Last week I exclusively revealed the design of the iPhone 8 and its ‘cut-out’ top bezel had limited Apple to just three colors at launch compared to the six variants – black, jet black, silver, gold, rose gold and (Product)red – currently available.

A blurry photo of a copper/bronze iPhone 8 variant has recently leaked
Kuo agrees the iPhone 8 will be limited to three colors but he states they will be black, silver and gold (some describe it as closer to copper/bronze) whereas my source believed black, silver and jett black would be the options. But both Kuo and my source believe this is the end of the road for rose gold.

New iPhone 8 Features

Where Kuo and I are fully on the same page, however, is fast charging.

In January I exclusively revealed fast charging was coming to the iPhone 8 and Kuo agrees, though he believes the fast charging power adaptor could be an optional extra while I understand that will only be the case for the iPhone 7S and iPhone 7S Plus (yes, fast charging is coming to them as well).
It is worth pointing out the quick charger plug for these iPhones will use USB Type-C, but the iPhone 8, iPhone 7S and iPhone 7S Plus will stick with the Lightning port. Disappointed about that? Well you won’t have to use the Lightning port at all if you don’t want to as there will be wireless charging as well.

All of which means the biggest iPhone 8 question is likely to be whether you can live without Touch ID and rely on the all new ‘Face ID’ facial recognition software instead? While supply of the iPhone 8 will eventually increase, this is going to be one area Apple needs to get 100% right on day one.

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