iPhone 5 (manufacturing process 008)

As the purported parts and cases thought to belong to the iPhone 6 continue leaking out, Apple is now said to have started mass production of a 4.7-inch handset variant. As for a bigger 5.5-inch version, the handset is understood to enter production in September, alongside upcoming new iPads.

If true, there may after all be some truth to the rumors that the two phones won’t launch simultaneously in order to avoid cannibalization. Just yesterday, for instance, the hit-and-miss DigiTimes said the 4.7 and 5.5-inch models of the iPhone 6 will launch separately as Apple wants to “avoid competition between the two models”

GforGames writes, citing Chinese media reports [Google translate], that the 5.5-inch iPhone 6 variant “hasn’t entered its mass production stages just yet”, while manufacture of its 4.7-inch counterpart has reportedly started.

Both the next iPad mini and the second-generation iPad Air will also enter mass production in September, the story has it.

This confirms previous rumors and a recent Wall Street Journal article stating Apple is gearing up for a record production of 70 to 80 million iPhone 6 units this year.

A look into Apple’s supply chain commitments made public in Apple’s recent SEC filing prove the firm is gearing up for a huge product launch this Fall. The chart below, via Morgan Stanley’s Katy Huberty and obtained by Business Insider, tells a very interesting story.

Apple supply chain commitments (June 2014)

According to Huberty, off-balance sheet commitments “confirm major product ramps later this year”. For those unfamiliar with off-balance sheet commitments, the term denotes prepayments for product components, money spent on factory tooling and machines, advertising, research and development, Internet and telecommunications services and so forth.

Long story short, Apple’s total supply chain commitments at the end of the June quarter surged a massive 46 percent year-over-year to $15.4 billion, or 36 percent sequentially.

iphone 6 scratch

The figure represents the highest annual growth since just before the iPhone 5 launched and the highest sequential growth for a June quarter since 2007 when Apple started selling the iPhone, says Huberty.

Clearly, Apple is expecting a lot from the iPhone 6 launch this Fall. Moreover, the massive surge in capital expenditure on manufacturing equipment is a strong indicator of brand new product categories entering Apple’s supply chain (iWatch, anyone?)

Here’s another chart on what Apple is up to, this one from Stifel (via Jay Yarow).

Apple supply chain commitments (Jay Yarow)

As for the iPhone 6, the reports cited by GforGames claim that Apple’s supply chain is “currently facing yield issues, adding that the production capacity will increase by up to 80-85 percent in the fourth quarter thanks to “various upgrades” that Apple’s contract fabricator Foxconn has brought to its production lines.

It’s been previously reported that Foxconn is preparing to deploy sophisticated robots to help assemble devices in its plants, though these Foxbots, as they’re called, will play more of a supporting role in factories.

Looks like it’s going to be a busy Fall this year for Apple.

What are your expectations?

  • Merman123

    If this is true, I’m going to upgrade my phone to the 4.7 as soon as available, and then my girlfriend’s whenever the 5.5 is available 🙂

  • coLin

    iPhone 3G – no video camera;
    iPhone 3GS – improved;

    iPhone 4 – no signal;
    iPhone 4S – improved;

    iPhone 5 – scratches and power button issues;
    iPhone 5S – improved;

    The next iPhone 4.7 ??????????
    {Can’t wait to see some flaws}

    • Jack Wong

      I am lost? Did we have finger print sensor on 5?

      Or are you expecting to see a “perfect” phone that fit “everyone”?

      • coLin

        I’m not expecting to be perfect, but if you pay 700 to 1000 dollars for a phone, you would expect to work without having to put a case on it to have better signal or other silly issues like this, right?

      • Jack Wong

        I do get a case for the iPhone since 5, not because of the signal issue, because I can’t change the back plate cheap.

        I did try to duplicate that problem, but I don’t hold the phone like that when I am really talking on phone.

        What about the drop call problem from at&t(it is not just iPhone)? We also pay 80+ every month for the service.

        Moreover, I bought a Lenovo x240 for my client for 1.5k in May with AC wireless… it gets disconnect randomly… when he switches from ethernet to wifi, he has to reset the wifi adapter manually… Lenovo/Intel finally have an update to fix this problem last week.

        There are bugs everywhere, I am more concern how they handle it after the customer bought the device.

        Have a nice weekend everyone~

    • im2slick4u

      All of the “S” models still have flaws, just like any electronic device. The 4 improved on the 3GS’ flaws and the 5 improves on the 4S’ flaws. Your comment really doesn’t state anything significant.

      • coLin

        They are testing the materials on us, the consumers. The non-S iPhones had a ‘recall’ and Apple fixed the issues for free (by offering a free case and fixing the power button on the iPhone 5 even though your warranty expired). After that, they ‘fixed’ these issues and have put an ‘S’ at the end.
        Why shouldn’t they release the ‘S’ product from the beginning?

  • carlos

    Not to sound like a prick but how many articles now have there been of when production will start..?

    • Jack Wong

      At least, it is in a count down cycle.

      After day1 of the next iPhone, we will start from the beginning of the cycle… iPhone 7 will be available in 2015 OH YEA!!!!

      • Straightshoota

        Actually you’ll probably have to wait until 2016 for iPhone7 because 2015 will be an “S” year!

  • Osama Muhammed

    i wanna get rid of my nokia -.- apple please

  • leart

    I’m waiting for the big one, since i own currently two perfectly working iphones i can upgrade but only for a bigger screen

    • Straightshoota

      Same here I have my iphone 5 with a jailbreak, and nothing can beat jailbreak. Except a huge screen and less time to wait for another jailbreak! 🙂

      • leart

        It would be a waste of money but I know that it will be very hard to resist in front of a iphone with big screen, no way im going to get one no doubt 🙂

  • babiloe

    Meh don’t care about apple income / stocks. If the product good, then people will buy it.

  • Tony

    I’m going to wait for the 5.5 at this point. The 4.7 release will have some extras over the 5s but if rumors are true the 5.5 will have extras over the 4.7 so waiting makes sense for more then just screen size.

  • Onyxus_Music

    I’ve been reading article after article claiming that TWO iPhone sizes will be released, when we’ve only seen, what could be the only proof, of a 4.7″ iPhone. Wouldn’t it be a surprise if this ghostly 5.5″ iPhone never materialized? That would certainly stir things up a bit. So, let’s jus wait it out and see what Apple actually has in store for us. 😀

  • Lagax

    So what if the 5.5″ device is the iPad nano?