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iPhone 5S Shipments May Be Constrained at one Supplier, Due to Low Fingerprint Sensor Yield ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ

July 16, 2013

โ˜… iPhone 5S Shipments May Be Constrained at one Supplier, Due to Low Fingerprint Sensor Yields. In what has become something of a tradition ahead of Apple’s product launches, Digitimes is reporting. This time, that the iPhone 5S may see constrained supplies at launch due to poor yields of certain components. In this case, the issues are said to be related to chips supporting fingerprint recognition and the device’s LCD, according to “industry sources.”

โ˜… The fingerprint recognition chip is designed by AuthenTec, an enterprise that Apple acquired for $356 million in July 2012. Issues related to the original design of the chip reportedly caused the lower yield rates, claimed the sources, adding that Apple outsources the production of the fingerprint recognition chips to Taiwan Semiconductor Manufacturing Company (TSMC) and the packaging of the chips to Xintec.

โ˜… The report also claims that production for the new device was supposed to start in late June or early July, but because of yield problems the ramp-up may be delayed at these suppliers until late July. According to Digitimes’ sources, this may result in Apple delaying shipments of three million iPhone 5S into the fourth quarter.

โ˜… Jeffries analyst Peter Misek, mentionied Monday (July, 15) that “small batch production” of the iPhone 5S had begun last month, with mass production ramping up later this month.

โ˜… In early April, a more reliable source, KGI Securities analyst Ming-Chi Kuo reported that production issues would likely “delay” iPhone 5S into September and that Apple’s third quarter may see smaller shipment growth than previously expected.

โ˜… TruePrint fingerprint sensing technology from AuthenTecReuters followed up with its own report in late April, mirroring Kuo’s report claiming that production issues would likely result in delay’s for Apple’s newest flagship device.

โ˜… Recall, at Apple’s recent 2013 earnings call, CEO Tim Cook gave warning to the Analyst arena (and indirectly to the Rumor Community) that predicting future Apple activities, based on supply chain chatter, was unreliable as Apple has multiple sources for device components, each delivering varying Yields and inconsistent supplier performance.

โ˜… Apple’s iPhone 5S is expected to launch sometime in the fall of 2013. Irrespective of the analyst’s writings or the rumor mill, Apple will release the next iteration of the iPhone when the device is deliverable at the very high quality standards that Apple demands, and certainly not mitigated by any chatter.

โ˜… Apple is gearing up to begin production on the iPhone 5S later this month with the goal of releasing it in late September or early October, Jefferies analyst Peter Misek wrote in a note to investors this morning.

โ˜… In addition to the iPhone 5S, Apple also last month started production of the much-rumored lower-cost iPhone, which will be priced at around $300 to $400, he added.

โ˜… Misek believes Apple will put in orders for 25 to 30 million iPhone units during the fall quarter, then ramp up to 50 to 55 million units during the holiday period. For the quarter beginning in December, Apple plans to build around 5 million iPhone 4S handsets, 20 million low-cost iPhones, and 25 million iPhone 5S handsets. He didn’t mention the iPhone 5 $605.00 at Amazon.
“Although the large build plan indicates Apple’s confidence in the new product launches, we remain cautious as our checks indicate mostly incremental feature upgrades for the iPhone 5S,” the report notes. “The Galaxy S4 $599.99 at Amazon continues to take share and the iPhone 5S will also have to compete with Google’s Moto X phone.”

โ˜… Hoping the iPhone 5S would look completely different than its predecessors, don’t hold your breath. We should note that Misek’s past predictions haven’t always been completely accurate.

โ˜… Misek’s previously forecasted that iPhone 5S production would begin in March for a June or July release. In addition, last year Misek incorrectly predicted that the launch of an Apple-branded television set was near.

โ˜… Misek’s latest forecast does, however, follow reports that contract manufacturing giant Foxconn has been recruiting factory workers to build Apple’s next iPhone. The Foxconn hiring push is being conducted “specifically for production of a new iPhone model,” according to a recent DigiTimes report.


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