Pixel Envy

Written by Nick Heer.

’Tis the Season

’Tis the season — not the holiday shopping season, but the iPhone Supply Chain Apocalypse/Catastrophe season. If you follow Apple rumours at all, you’re probably familiar with the steady relentless drip of stories about how different parts suppliers have received cuts in orders, all saying that the latest round of iPhones is doing poorly compared to its predecessor. These rumours seem to get more alarming every year, yet the iPhone seems to do just fine — funny how that happens. Despite Apple reporting strong iPhone X sales for every quarter it was available, for example, it took analysts until this September to admit that they were wrong about its success.

This year, there are plenty of such stories, all trumpeting a similar tale and bolstered by Apple’s announcement during their last earnings call that they would begin reporting their financials more similarly to their peers by not releasing unit sales figures.

Take this report, from Takashi Mochizuki at the Wall Street Journal (or bypass the paywall):

Apple suppliers have also recently resumed making the iPhone X, the 2017 model that Apple had stopped selling at its own stores, people familiar with the matter said.

In the past, Apple has produced legacy models for select markets where there is enough demand for those devices, the person familiar with Apple’s sales and production tactics said. The company views it as a way to fuel sales and boost margins, as the components often cost less and manufacturing equipment has depreciated, he said.

People involved in the supply chain said the resumption of the X is due in part to Apple’s contract with Samsung Display, a major provider of iPhone X’s organic-light emitting diode display, or OLED, panels. Apple needs to buy a certain amount of the panels from the South Korean maker, and given the cut in XS and XS Max, Apple is trying to fill the gap with the old device, they said.

To be clear, I don’t know anything more about this than what the Journal wrote. Maybe iPhone XS sales really are falling so far below Apple’s expectations that they need to begin producing a superseded device again for sale in specific markets. The Journal also doesn’t provide more specific sourcing for these claims than “people familiar with the matter”. But, given that it specifically mentions that this relevant to a Samsung Display contract, it’s a safe bet that it’s based on sources working specifically with the display components, and they may not necessarily know whether production of iPhone X devices has resumed.

I mention all of that because, as far as I can tell, there’s a more obvious reason why Apple would suddenly need a bunch of brand new iPhone X display components: they recently launched a repair program for erratically-responding iPhone X displays.

Maybe sales of brand new iPhones really will be much lower this year compared to previous years. I have no financial or personal interest in specific sales figures; there could be loads of reasons for that. But this panic happens every year. You would think that context would be important.