New iPhone headed to production, reports say

Deliveries of the just-released iPhone 5 have been painfully slow, and now a Chinese-language newspaper reports that Apple is pushing ahead with a successor.

By Kim Peterson Nov 12, 2012 2:55PM
Credit: 2012 Apple Inc
Caption: Apple iPhone 5If you buy an iPhone 5 from Apple (AAPL), you won't get it for a good three weeks. And that is unacceptable.

The world's most valuable company is running into problems with its most important product. It can't make enough. Yes, demand is high, but there's more to the story. Apple's manufacturing partner, Foxconn, is having a bunch of production issues.

"The iPhone 5 is the most difficult device that Foxconn has ever assembled," an anonymous official at the company told The Wall Street Journal last month. "To make it light and thin, the design is very complicated."

Critics say the phone is absolutely amazing. "This is without a doubt the best iPhone yet," Engadget raves. "This is a hallmark of design. This is the one you've been waiting for."

And waiting for . . . and waiting for. A phone is not worth that wait. Not when plenty of competing phones built on Google's (GOOG) Android platform are available. Apple has a real problem on its hands -- one that could dent its revenue this holiday quarter. Apple sold more than 5 million iPhone 5 units in the first three days, but analysts were expecting as many as 10 million.

"We believe that sales could have potentially been much higher if not for supply constraints," William Power, an analyst with Baird Equity Research, wrote in a client note, according to Reuters.

So it's not that surprising to read rumors that Apple is basically moving full speed ahead with the next version of the iPhone, unofficially named the iPhone 5S. Digitimes reports that Apple is expected to begin production on a small batch of iPhone 5S phones in December, likely only 50,000 to 100,000 units.

"Facing low yield rates in the production of iPhone 5, Apple has accelerated the certification processes for related parts and components for the iPhone 5S," reports the Chinese-language Commercial Times, according to Digitimes. The Commercial Times also says the iPhone 5S will enter mass production in the first quarter of next year.

That timing would be highly extraordinary, since the iPhone 5 just launched in September. "If this new report from China turns out to be accurate, it could represent a dramatic shift in product release strategy for Apple, perhaps spurred on by increased competition from the likes of Samsung, and a raft of other Android-based smartphone competitors," PC Magazine writes.

What about this theory? The iPhone 5 is so tough to make, forcing the normally reliable Foxconn into hardware scratches and other production issues, that Apple is essentially moving on to the next version, which it will ensure has none of those problems.

Of course, this could all be an empty rumor. Digitimes is not known for its sterling accuracy. But even a rumor could hurt Apple's bottom line. If enough people think a new iPhone 5S is coming out early next year, then current sales of the iPhone 5 will take a hit. Rumors have dinged Apple's revenue plenty in the past.

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Tags: AAPLGOOG
89Comments
Nov 12, 2012 4:06PM
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This is why Apple earns so much money. The apple loyalists keep shelling out dollar after dollar every time a new device is released. Like heards of sheep, the apple loyalists continue to "need" the newest Iphone, newest Ipad, and now, for some strange reason, need the Ipad-min. I give apple kudos, they have the public fleeced into thinking they always need the newest version of something even if it means shelling out hundreds each and every time. Their marketing department is the best. Imagine if they went into the auto business.....lol.
Nov 12, 2012 5:10PM
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It's amazing how out of touch we are with our First World problems: There are people around the world who lack food and basic necessities, living in absolute poverty. In fact, many of those folks work at Foxconn. But oh my God, I might have to wait three weeks for my iPhone, and THAT is "unacceptable". Sad...

Nov 12, 2012 4:39PM
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The Galaxy IIIs is a far superior product.....hands down!
Nov 12, 2012 5:09PM
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Really? What's the great end all thing you can do on an iPhone that you can't on an android? Pay bills? call people? have maps? oh but the iPhone maps totally suck so there goes that. What else ya got that you can do that i can not with my S3?
Nov 12, 2012 5:08PM
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Someone,

When you say "fumbling to do absolutely nothing on their phone" are you referring to me being able to actually view and use the entire internet as opposed to getting that lovely message "You cannot access or view this site with this product"  Or are you referring to my phone being able to give me correct navigation?  Do you want me to go on?  You can keep your Apple product and you can continue to give them your $$$.  Their great marketing department is looking for consumers just like you.

Nov 12, 2012 4:47PM
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Maybe this time, it'll have - "THE BIG SCREEN!!"
Nov 12, 2012 5:47PM
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Disclaimer: While I think Apple products are sometimes innovative the people that follow Apple and the majority are obsessive compulsive that rather be buried in a dysfunctional instrument than have a polite conversation with a person. They are all intervened self centered individuals concerned more about their self absorbed life than the experience of life itself or are afraid of life all together.
Nov 12, 2012 4:55PM
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I bought the iPhone 5 about a month ago. I traded in my iPhone 4 for $136.00 and paid $64.00 for the 5 because I had my two year upgrade. I got it because it's bigger, runs faster, and is lighter. It's not vastly different, but definitely better. Why do companies have to dramatically change their product? Apple improved on a phone that's easy to use and something people love. There is no reason to bash it, unless you're not proud of the phone you have. I haven't seen anyone boast about the phone to no end. I see Apple working like every other company--advertising their product, trusting that it will boost sales. 

I got it, I like it. 

Don't hate the player, hate the game.
Nov 12, 2012 3:24PM
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Is iphone 6 already in the works?  Is iphone 6s already in the works?  Genius company.  They have shot themselves in the foot.  You can not have the latest greatest product coming out every few weeks.  Everyone will just keep waiting.  
Nov 12, 2012 6:26PM
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The best feature of the iPhone is the one that makes you buy the next iPhone.
Nov 12, 2012 7:55PM
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Get a Nokia Lumia 920 from AT&T for $99 in cyan, yellow, red, white or black. It won't crack or scratch and has a better camera and display and Windows 8 is far superior to any Linux or Unix shareware.
Nov 12, 2012 4:43PM
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Why wouldn't they make a 6? or a 7 or 8 or 9?

 

Why did Ford decide to make a car after the model T? Could it be because competitors constantly make better products so you in turn need to make yours better to keep up?

 

Im not sure why people with Apple products are snobs. I have an Ipod so am I a snob?

 

Why do people resort to name calling? It's a simple news article about a new product. Calm down people, I'm sure your phone is much better, that's why Apple has sold MILLIONS and MILLIONS of phones, Ipads, and Ipods, because they suck i guess??

Nov 12, 2012 6:52PM
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I buy Apple products every week. I buy Red Apples, Green Apples and my favorite Yellow Apples.
Nov 12, 2012 4:47PM
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As people get squeezed on economics and the law of diminishing utility sets in for smart devices (and alot of other marginal products) say goodbye to most of the consumer tech business.

Say hello to reliable lower tech stuff.
Nov 12, 2012 7:43PM
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Who needs Apple anymore... I got rid of my iPhone 4 and just upgraded to the new Lumia 920. Very pleased with my new Windows 8 Phone and didn't get ripped off buying over priced iCrap.

Don't fall for their continual upgrade scam anymore - Wake up iSheep!!!!
Nov 12, 2012 7:27PM
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OH ****  a new apple!!! When does it come out?  I have to have it now!!!  I cant have an i5 if the 5s is available.  So what if my kids dont have food or shelter./  I will have the newest apple!!!   LMAO
Nov 12, 2012 7:56PM
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We can make it here in America without the production problems.
Nov 12, 2012 5:47PM
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Apple 6 has a new feature... if you fall behind on your phone bill, it fires a laser beam at your eyes while you are driving texting to blind you and fires another at your right knee that forces you to floor the gas pedal. They are giving them away to ambulance-chaser lawyers and judges for free as long as they agree to never use the word "apple" in the courtroom even if it interferes with judgments. Its less costly to eliminate delinquency this way but they are concerned about have to "give" anything for free they could otherwise squeeze people to pay for.
Nov 13, 2012 7:47AM
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Who cares about Apple.  There are better products on the market and for less money.  I hope Apple rots!
Nov 12, 2012 3:07PM
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Yeah, it's a huge bust....what a stroke!
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