Apple Inc. (AAPL): Why The iPhone 6 Will Not Be Delayed


Apple Inc. (NASDAQ:AAPL) watchers on Thursday got an interesting got a peek into the iPhone-maker’s supply chain woes after a report from Reuters revealed that suppliers for the iPhone 6 has had troubles making the display of the device. However, The Street‘s Chris Ciaccia believes the troubles of iPhone 6 suppliers won’t delay the release of the next iPhone.

Apple Inc. (NASDAQ:AAPL)’s  suppliers are said to have been told to remake display assemblies of the 4.7-inch iPhone 6 because initial units were deemed not bright enough by the Cupertino, California based consumer electronics giant, according to a Reuters report. The iPhone-maker is believed to be preparing to launch two new iPhones, a 4.7-inch model and a 5.5-inch model during its September 9 event.

Apple, is AAPL a good stock to buy, iPhone 6, production glitch, display, Chris Ciaccia

However, Ciaccia believes that the next iPhone will not be delayed even if production of the 4.7-inch iPhone’s display hit a glitch. According to Ciaccia, Apple Inc. (NASDAQ:AAPL) Tim Cook himself addressed a seemingly similar issue earlier this year.

In January, Cook commented about being asked too many questions about a particular rumor about one of their products.

“I don’t want to comment on any particular rumor because I would spend my life doing that. But I would suggest it’s good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business,” Cook was quoted as saying during an earnings call.

According to Cook, who was the company’s COO and its supply chain champion before assuming the CEO role after Steve Jobs, Apple Inc. (NASDAQ:AAPL)’s supply chain is very complex and the company has a lot of suppliers for components. He said that among these suppliers, yields, supply performance, beginning inventory positions and many more factors may vary.

This makes the supply chain development a “non-event,” Ciaccia said. The trouble with the the company’s suppliers is said to have originated when the iPhone-maker ordered suppliers to use just one backlight film for the display of the smaller iPhone 6 rather than the typical two layers of film to reduce the thickness of the display assembly.

The hiccup meant a stoppage in production in June and July, Reuters said, but added that it remains to be seen whether the iPhone 6 release will be delayed or limited because of the production problem. Production is back to normal, according to the news organization, with suppliers working “flat-out” to recoup lost time.

Apple Inc. (NASDAQ:AAPL)’s investors includes Carl Icahn‘s Icahn Capital LP. The hedge fund, by the end of the second quarter of 2014, reported about 52.76 million shares in the company.

Disclosure: None

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