'iPhone 7' production affected by low yields on waterproof speaker, dual camera - report

As Apple gears up to launch its next-generation iPhone, key components reportedly face production issues, with low yields allegedly seen for the new dual-lens camera expected on the "iPhone 7 Plus."

Citing an industry source familiar with the issue, Nikkei reported on Friday that the "iPhone 7" could face supply issues at launch. Apple's next handset is expected to be unveiled in a matter of weeks, potentially at a keynote presentation on Sept. 7.

Alleged component yield issues were also cited by analyst Jeff Pu of Yuanta Investment Consulting, who subsequently trimmed his total iPhone production forecast from 120 million units for July-to-December down to 114 million.

Beyond the new dual-camera system on the so-called "iPhone 7 Plus," Pu suggested that Apple has also been plagued by defects in a new waterproof speaker it plans to include in this year's handsets. Waterproofing is expected to be a key feature of this year's upgrade, which is rumored to ditch the 3.5-millimeter headphone jack and adopt a new haptic feedback home button to help accomplish that goal.

Demand usually outstrips supply for the debut of any new Apple product, and if that were the case again this year, it would come as no surprise.

The key number, at least at launch, will be 13 million — that's how many iPhone 6s units Apple sold during the first three days of availability last year. Investors will be clued in to how the next iPhone performs at launch as a potential indicator for how well it will sell over the product's lifespan.

Pu expects that Apple won't be able to build as many "iPhone 7" units in the second half of this year as the company did iPhone 6s units during the same span of 2015. His forecast calls for 74 million "iPhone 7" builds in the latter half of the year, compared with an estimated 84 million for the iPhone 6s last year.