Apple Inc. (NASDAQ:AAPL) may not be able to get the iPhone 8 built this year after all. That’s according to a new rumor that’s been going around both Wall Street and the tech world for several days. The device will be delayed for weeks, or months, if the stories are true.
Wamsi Mohan and Stefano Pascale of Bank of America’s Merrill Lynch, in a note released on Wednesday, said that the iPhone 8 release date was likely to be delayed some weeks. There’s a storm stirring in the sub-tropics, and it appears that Apple stock may be headed for depression as a direct result. The firm, if rumors are to be believed is having trouble in everything from OLED screen yields to software.
All of this adds up to volatility in Apple stock, and there may be more on the way. As is always the case with iPhone 8 rumors, however, it’s important to take this story with a big grain of salt.
This isn’t the first iPhone 8 release date delay rumor
Back at the start of June RBC Capital Markets emerged with a similar story. It said that “delayed OLED production ramp, with likely shift by ~1-2 months for volume OLED production.” That would get in the way of the iPhone 8 release date.
That report wasn’t even the first of its kind. Cowen and Company, Drexel Hamilton and KGI Secuities all previously reported that the iPhone 8 delay would get in the way of an orderly release. Back in April and May these delay rumors were focused on components like the fingerprint reader, and the firm’s 3D camera.
If stories of a delay have been around for so long, why is Wall Street only seemingly sitting up and listening right now? The answer appears to be the lateness and seriousness of the rumors. We’re in July and some outlets are actually reporting that Apple Inc. (NASDAQ:AAPL) is having design problems with the smartphone.
According to a report from Fast Company Apple is in a panic trying to get the iPhone 8 to work at all. That seems a little dramatic. Apple is highly experienced at hitting release dates. The firm knows precisely what it’s doing when it comes to logistics. Though it might be having tech trouble, there’s little chance a redesign is on the table right now.
Here’s why the iPhone 8 rumored to be delayed
The technology problems that have been brought up in the delay story hasn’t focused on just one part of the phone. The most prominent news has centered on the OLED screen. According to rumors, Apple simply won’t be able to get its hands on enough units of the screen before production begins.
Other components that have been rumored as issues include the 3D camera that will reportedly work as an authentication tool. The Cupertino teams behind the iPhone are also said to be putting a fingerprint reader behind the screen. That, according to some supply chain leaks, is also causing problems for the firm’s production schedule.
There are also yield issues, according to Brian White of Drexel Hamilton, related to the firm’s 3D components. Some rumors have suggested that Apple will add a 3D laser system to the phone for Augmented Reality.
The big iPhone 8 delay, however, likely won’t be all that dramatic. It seems more likely that we’ll simply see shortages of the device around the launch date. Most of Wall Street still expects Apple Inc. to launch three new phones on the same day in September.
Those looking to get their hands on the most expensive iPhone ever may have to wait a little longer in line. That shouldn’t be much of an issue for the firm’s more die hard fans.
Apple stock could be in much bigger trouble
“While battery life could improve with OLED, our conversations with industry participants suggest that most consumers will not notice any major ‘must have’ experience changes because of new OLED displays versus LCD,” reads a recent report from Barclays. It’s a line that should scare anybody who has bought into the Apple Inc. (NASDAQ:AAPL) “super cycle” mythos.
Mark Moskowitz, who authored the report for the British investment bank, isn’t standing for it. He reckons that OLED and other tech updates won’t change enough to really boost demand.
A release date delay could harm Apple Inc. stock by pushing down margins and lowering sales in the fourth quarter. The big problem for the firm, however, comes if people aren’t that interested even after the device is in stock.
Common wisdom, a dangerous possession for a stock picker, suggests that iPhone sales were depressed last year because of a stagnant design. We’re pretty sure that the iPhone 8 is going to make big changes in this regard. If the common wisdom is wrong, however, that might not be enough.
Wall Street is obsessed with iPhone sales growth after a harsh 2016. The investment banks want to see demand for the iPhone hit new highs this year. With supply trouble getting in the way, and skepticism omnipresent, that may be hard to achieve.
Watch out for an iPhone 8 release date surprise
Despite the big rumors about an iPhone 8 delay, Wall Street may still be in for a surprise on the release date. One solution that has been mooted is the release of an unfinished device. According to these rumors Apple may consider releasing the iPhone 8 with some of its features software disabled.
If the hardware is present Apple may be able to turn those features on through updates later on in the life of the device. That would be a compromise, but it may be better for the firm’s stock than the other options on the table.
Apple Inc. (NASDAQ:AAPL) has a huge amount of market power. CEO Tim Cook, above all else, is a master of logistics. Over the last decade that has meant the firm has gotten its big releases out on time. Sometimes they needed to be patched later, sometimes they weren’t quite as good as planned.
They always hit the market more or less on time, however. If you’re going into the big launch expecting a big delay it’s probably better to be prepared for a surprise.