Apple iPhone 5 delay, chip worries surface (again)

Apple iPhone 5 delay, chip worries surface (again)

Summary: Reports out of China indicate that the iPhone 5 will be delayed. Comments from Qualcomm indicate otherwise. We'll find out in the fall.

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Worries about whether Apple's iPhone 5 will be delayed due to a shortage of 28 nanometer processors are surfacing again. The semiconductor supply issue is no small matter given Apple missed Wall Street's fiscal third quarter earnings and revenue estimates and has a slower product cycle than rivals like Samsung.

A report out of China's First Financial Daily indicates that Apple will delay the iPhone 5 because of a shortage of 28 nanometer chips. These rumors have surfaced before and it's a bit unclear how much weight to put on them. 

After all, Qualcomm executives on its most recent quarterly earnings conference call indicated that the company was getting a handle on the 28nm manufacturing issue. Qualcomm is the only processor player with integrated 4G, application and modem technology.

Also: Apple's Q3 disappoints; iPhone shipments light

Specifically, Qualcomm CEO Paul Jacobs said:

Although our outlook for semiconductor volumes in the fiscal fourth quarter has been reduced from our prior expectations, we are ramping our supply of 28 nanometer chipsets. We accept expect this ramp, along with new devices launched for the holiday season, to result in a strong December quarter for our semiconductor business.

That supply is most likely to go into the iPhone 5.

Jacobs did add:

We are continuing to see strong demand for our new Snapdragon S4 and other 28 nanometer chipsets, and that demand continues to exceed our available supply. We will continue to ramp capacity in the upcoming quarters consistent with our prior expectations; however, the constraints on 28 nanometer supply by continuing to limit our potential revenue upside this fiscal year.

Qualcomm said it has contracted with multiple foundries for the September and December quarters. Jacobs added that it will be able to closely match supply and demand as it exits 2012.

Most analysts expect the iPhone 5 to launch in October. Apple isn't saying much and won't.

It's also worth noting that Apple is the largest semiconductor buyer, according to IHS iSuppli. Apple in 2012 will buy $28 billion worth of chips, up from $24 billion in 2011. In other words, if someone is gobbling up all the 28nm chips in the supply chain it's likely to be Apple, which has the clout to ensure it has components for the iPhone 5.

applechips

The most likely outcome: The iPhone 5 will launch in October, but supplies will be tight for a few months.

Topics: Mobility, Apple, Hardware, iPhone, Smartphones

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56 comments
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  • Good!

    Maybe Apple will realize they can get more help by cooperating inatead of litigating!
    slickjim
    • How exactly

      does Apple's litigation have any impact on a manufacturing issue causing a shortage? It seems the only one they really need help from is Qualcomm. Given Apple's the biggest buyer, I highly doubt Qualcomm is dragging their feet to get this resolved just to spite Apple. After all, if Apple suffers, their bottom line suffers too.
      TroyMcClure
      • Samsung Qualcomm Apple triangle

        You do know that Samsung has pulled the agreement to let Qualcomm use it's GSM patents and guarantee that Samsung doesn't go after their customers?
        You know that Samsung pulled this agreement in response to Apple suing them for copying the ipad's appearance (which by the way looks just like the Samsung digital photo frame- heck, let's call it a media player!- which preceeded it) ?
        warboat
        • Actually Samsung only 'pulled the agreement'...

          in regards to Apple. Every other Qualcomm customer would get the same usual rate for its FRAND property.
          msalzberg
        • Apple

          is getting what it deserves. if you start fking with everyone in the market, then the market will fk with you back.
          Jimster480
    • Apple already gets as much help as necessary since it pays good money and

      ... it pays these in advance.

      As to supposed delay, the new iPhone (iPhone 4G/iPhone 6 -- but hardly iPhone 5) will depend on both 28 nm and 32 nm technologies.

      Since according to Qualcomm there is no issue with 28 nm communication chips now -- hence the rumours about 28 nm issues are just ignorant made up lie -- there is still could be problem with 32 nm SoCs A5X or A6 that will go to the new iPhone.

      However, there is no information that Samsung's plant in Texas or elsewhere has problems with 32 mn technology.

      So overall we can consider this rumour as nonsense.
      DDERSSS
      • Uh hu - Like yeah riiiiight

        You honestly expect a company with supply issues who thinks they can catch up to tell the unvarnished truth? If you do, it must be nice on your planet.
        rhonin
      • How do you know it pays good money, and pays in advance?

        I've never seen anything anywhere that stated that.

        Actually, I do remember reading an article here how Apple is sqeezing it's suppliers even more.

        Doesn't sound like good money, or advanced payment to me. Does it sound that way to you?
        William Farrel
        • Apple tightness

          Apple didn't even pay its SHAREHOLDERS dividends for years let alone pay its suppliers in ADVANCE!
          This is a company that sues Samsung, a company that makes them components! You think they would pay in ADVANCE? haha!
          Apple is the last vendor on Earth to give money to anyone. For them to do it in advance? no way.
          warboat
          • Talking through your hat?

            Where it makes sense, they pay in advance:
            http://www.ebnonline.com/author.asp?section_id=1071&doc_id=203635
            Robert Hahn
          • Irrelevant much?

            Many companies do not pay dividends. What on earth does this have to do with paying suppliers. In fact, even when Apple was a magnitude smaller in size, they routinely paid suppliers in advance, even paying a single vendor almost 4Bn US in advance.
            Why do you post such nonsense on matters you, literally, know NOTHING about?
            .DeusExMachina.
          • ZDNet: I am not anonymous

            There is also this from 4/2011:
            "Analyst Brian White with Ticonderoga Securities said in a note to investors on Thursday that Apple began "aggressively attacking" the component situation in Japan following the earthquake and tsunami that struck the country. The iPhone maker reportedly sent executives to suppliers immediately to ensure adequate supply of components, and also began offering upfront cash payments."

            So, you were saying

            -DeusExMachina
            .DeusExMachina.
          • paying GOOD MONEY in ADVANCE

            Apple doesn't PAY IN ADVANCE in the way you and I understand it.
            They pay in advance to BUY OUT a production facility without actually paying to run the operation. It is simply an anti-competitive move by Apple.
            Apple tried to get Samsung to commit to AMOLED displays for them but failed and things got worse with Samsung over the last couple of years with patent battles. They are looking to get away from depending on Samsung without actually paying to run their own production and incurring all the costs and risks.
            They also bargain aggressively to cut margins thin for the manufacturers and advance payment is part of their bargaining. They are not paying the asking price in advance to help out the suppliers, they are screwing the suppliers to the bone to plump up their own profitability.
            Apple doesn't pay GOOD MONEY in ADVANCE, they pay SH17 MONEY in ADVANCE and suppliers just cave in for them. They are not doing any of their suppliers any favours.
            warboat
          • Apple's Leveraging of their buying power is just a savvy business move

            Leveraging their buying power is a smart move and I don't think they are putting a gun to the head of these suppliers. They may not make as much as they would like to make but they are making a profit or they won't be in business for long.

            I agree that Apple is looking for ways to wean itself from purchasing any of Samsung's products but that may take awhile.
            daconsul
          • Make stuff up, much?

            "They pay in advance to BUY OUT a production facility without actually paying to run the operation. It is simply an anti-competitive move by Apple."

            First, this just simply is not true. Feel free to provide citations to back up this idiotic claim. Good luck with that.
            Second, it is no more anti-competitive than making a better product. Locking up the supply chain is hardly morally bankrupt.

            "Apple tried to get Samsung to commit to AMOLED displays for them but failed and things got worse with Samsung over the last couple of years with patent battles."

            Yeah, that's flat out B.S..

            "They are looking to get away from depending on Samsung without actually paying to run their own production and incurring all the costs and risks."

            Um, so what?

            "They also bargain aggressively to cut margins thin for the manufacturers and advance payment is part of their bargaining."

            First, again, so what? Second, and more importantly, you just contradicted yourself. They either pay in advance or they don't. Their rationale is irrelevant.

            "They are not paying the asking price in advance to help out the suppliers, they are screwing the suppliers to the bone to plump up their own profitability."

            And again, so what? They are a BUSINESS, not a charity, and the fabricator is free to not sign the contract.

            "They are not doing any of their suppliers any favours."

            Tell that to all the suppliers that would kill to have one of these contracts.
            Hate much?
            .DeusExMachina.
          • I hope for any potential employees that you do not run a business warboat

            Everything you criticized Apple for would be commended by any business person with any sense what so every. You either have absolutely no clue how business works or your small minded hatred for Apple blinds you to how good they are at supply chain. No one single supplier to Apple is forced to work with them, they do it because it makes good business sense. Sure, they give Apple cut rate pricing but if you have any clue you would realize this happens every single day in pretty much every business when you are talking about volume
            non-biased
          • I don't disagree with Apple

            While I may not be a fan of Apple, I don't disagree with their aggressive way of handling supply chain and the deals involving advance payments.
            What I was pointing out is the misconception that Apple pays in advance with good money as a favour to its suppliers. Some will argue pedantically the point about advance payments but they miss the point.
            warboat
        • And the fact that you, of all people, have never seen it means what?

          Seriously, seeing the level of misinformation you evince daily with your posts, why do you think your personal knowledge is at all germane?
          .DeusExMachina.
  • The Cupertino marketing firms slide downward.

    Biting the hand that feeds you is one issue and the use of R&D companies like Samsung tech breakthroughs as their own (Retina Display) ruffles a number of Asian feathers.
    sickntired44
    • It seems like Apple's the one feeding...

      allot of companies revenue through the success of their products that they pay said companies to make for them. Do you really think Samsung isn't thrilled to be one of the primary component maker for Apple's tech? They may not like the litigation, but trust me, they don't want Apple taking their business across the street to Sharp, LG, etc.
      TroyMcClure