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?