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iPhone X, iPhone 8 Plus production accelerating alongside cutback in orders for iPhone 8

Reports from the supply chain suggest that any production problems that may have plagued the iPhone X are long past, and Apple and its manufacturing partners will increase production to ship about 26 million of the OLED model in the holiday quarter.




A new report generated by KGI Securities authored by Ming-Chi Kuo not sees a 35 percent to 45 percent growth in production in the holiday quarter, versus Apple's last fiscal quarter of 2017 that ended in September. Kuo believes that the supply increase is warranted because of widespread positive reception to the high-end device, and robust Chinese New Year holiday demand.

On the other side of the coin is the iPhone 8. Given the demand for the iPhone 8 Plus being greater than that of the iPhone 8, production of the smaller device in the family is expected to fall between 50 percent and 60 percent in the holiday quarter. Kuo believes that the iPhone 8 Plus is "cannibalizing demand" for the iPhone 8, and some of Apple's manufacturing partners will switch production lines from the iPhone 8 to the iPhone X to work out supply and demand balance issues.

Other monitors of the sales channel suggest that the 2017 Plus model is exceeding the non-plus version of the same device for the first time. On Thursday, a research firm reported that in a few days of September availability, Apple shipped 6.3 million iPhone 8 Plus units, versus 5.4 million of the smaller iPhone 8.

Apple appears to have predicted this balance and strong demand for its high-end iPhones. The company is expecting its most profitable quarter ever, and is expecting between $84 billion and $87 billion in revenue for the quarter.