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iPhone X supply constraints limit Apple's production to less than 10,000 units per day

Mass production of the iPhone X faces significant challenges ahead of launch, particularly for the gold model, with new technology limiting Apple to producing less than 10,000 units per day, according to analyst Ming-Chi Kuo.




Kuo, of KGI Securities, issued a note to investors on Monday, a copy of which was obtained by AppleInsider, warning that the iPhone X "will remain in severe short supply for awhile."

In addition to general production issues, he also believes that the new "blush" gold shade will face its own, specific problems in manufacturing. He said that the gold iPhone X will be in extremely low volume at launch, and could even go on sale at a date later than the other models, expected to be offered in black and white options.

However, Kuo said that any shipment delays will have a limited effect on Apple's stock, as well as shares of its suppliers. Simply put, Apple will still sell the same amount of phones, just at a later date.

For Kuo, the main question leading into Apple's event on Tuesday is whether the new facial recognition technology is capable of winning over consumers. Specifically, he questioned how well the new Face ID feature will replace Touch ID.

"Apple has to win over consumers by demoing a smooth-running, easy-to-use and secure feature," Kuo said.




With expectations for the OLED iPhone X at a fever pitch, how the market reacts to the 3D sensing forward facing cameras will be a "big factor" for how shares of Apple perform, he said.

"If market opinions are mixed after the media event, then we'll have to wait until shipments begin to see if consumers like what the OLED iPhone has to offer," he said.

Monday's report gave no indication of the timeline for launch of the iPhone X. It's expected that the LCD-screened iPhone 8 and iPhone 8 Plus will make their way into the hands of consumers next Friday, Sept. 22, but the iPhone X could launch at a later date due to the aforementioned production issues.

Though last-minute leaks have seemingly spoiled all of the surprises, all will be revealed on Tuesday when Apple hosts an event at the Steve Jobs Theater in Cupertino, Calif. Beyond the iPhone X and iPhone 8, the company is also expected to unveil a new Apple Watch with LTE, as well as an Apple TV capable of streaming 4K-resolution content with high dynamic range colors.

AppleInsider will be at the event live with coverage and analysis. The announcement begins at 10 a.m. Pacific, 1 p.m. Eastern, and readers can install the AppleInsider app for iOS to get push notifications for news as it breaks.