- The iPhone 12 release may be pushed back a few months due to the coronavirus.
- The iPhone 12 development process has been subject to delays on account of travel restrictions to China.
- Apple will make a decision on the iPhone 12 release date sometime next month.
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Though Foxconn recently said it believes Apple’s iPhone 12 will be ready in time for a customary late-summer launch, a new report from The Wall Street Journal relays some fairly significant leaked inside info suggesting that Apple is currently “scrambling” to avoid production delays. The issue essentially boils down to Apple’s inability to send engineers over to China due to travel restrictions stemming from the coronavirus. Aside from Trump’s own travel ban, China last week announced its own travel ban which precludes non-Chinese citizens from entering the country.
Consequently, various iPhone development processes have either been put on hold or are moving along at a much slower pace than usual.
Unable to travel to China, its U.S. engineering team is using video calls to direct Chinese colleagues through iPhone prototype assembly at factories in Asia, people familiar with the matter said. The company previously did a test run of that process in January.
A similar report from last week said that Apple engineers have been unable to meet face to face with suppliers to help finalize various design elements of iPhone 12 prototypes. A few of these meetings are currently on hold and, it stands to reason, not all of them can be replaced with a video conference call.
Another issue Apple is grappling with involves how many components it should order from suppliers. Though Apple typically wields masterful control over its supply chain, the economic fallout from the coronavirus has left everything up in the air. The simple reality is that demand for the iPhone 12, if we assume it launches on time, could be incredibly weak. Especially with unemployment in the U.S. at an all-time high, the notion of people paying upwards of $1,000 for a brand new iPhone is simply at odds with the economic reality many individuals are currently facing.
Apple currently finds itself in something of a lose-lose situation. If it doesn’t place enough orders and demand is robust, the iPhone 12 will be subject to potentially significant supply shortages. On the other hand, if Apple orders too many components, it could very well eat into Apple’s bottom line.
Being stuck with extra modems or unsold 5G iPhones could cut into the rich profit margins that helped make Apple the first U.S. company valued at $1 trillion, said Mehdi Hosseini, an analyst with Susquehanna International Group.
Apple will reportedly reassess the iPhone 12’s release date sometime next month. Though the iPhone 12 release window remains anybody’s guess, there have been reports that Apple might push the release date back until November. A worst-case scenario might see Apple delay the iPhone 12 release until 2021. However unlikely that is, it’s clear that Apple is dealing with a complex and rather unprecedented situation.
As the first iPhone to support 5G, the iPhone 12 was poised to inject a bit of life into otherwise stagnant iPhone sales. From the way things look now, however, it’s hard to imagine a scenario where iPhone sales do anything but see a huge drop-off across the entire year, and perhaps well into 2021.