De­mand for iPhone X boosts Ap­ple sup­pli­ers

Min­utes af­ter pre­orders open, ship­ping times for new de­vice ex­tend up to six weeks in U.S.

Toronto Star - - BUSINESS - YU-HUAY SUN BLOOMBERG

TAIPEI— Ap­ple’s big­gest sup­pli­ers, from Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC) to Hon Hai Pre­ci­sion In­dus­try Co., climbed Mon­day af­ter de­liv­ery times for the iPhone X stretched to as much as six weeks in the U.S., un­der­scor­ing de­mand for the mar­quee smart­phone.

Shares in Hon Hai, the main as­sem­bler of Ap­ple de­vices, climbed as much as 3.6 per cent in Taipei. TSMC, the U.S. com­pany’s big­gest chip sup­plier, rose as much as 2.5 per cent to a record. Other sup­pli­ers from AAC Tech­nolo­gies Hold­ings Inc. in Hong Kong to Lens Tech­nol­ogy Co. in main­land China also ad­vanced, track­ing Ap­ple’s own gains Fri­day.

Ap­ple, which says de­mand for its sig­na­ture gad­get is “off the charts,” be­gan tak­ing or­ders for the iPhone X Fri­day and — within min­utes — ship­ping times length­ened to as much as six weeks in the U.S. That sug­gested tight sup­ply over the cru­cial hol­i­day sea­son, when re­tail­ers make the ma­jor­ity of their rev­enue. The U.S. com­pany was also said to have strug­gled to make enough of its costli­est de­vice, in part be­cause of qual­ity is­sues with the sen­sors that make Face ID pos­si­ble.

In Europe, shares in Aus­tri­an­based Ap­ple sup­plier AMS gained as much as 5.5 per cent to 77.65 Swiss francs ($100) Tues­day in Zurich. Shares in Dia­log Semi­con­duc­tor rose as much as 6.8 per cent to € 43.14 ($64.33) on Mon­day in Frank­furt.

AMS pro­duces op­ti­cal sen­sors for mo­bile phones, while Dia­log pro­vides power-man­age­ment chips to Ap­ple.

The pre­orders sit­u­a­tion is “eas­ing con­cerns that de­mand for the iPhone X might not meet ex­pec­ta­tions,” Bloomberg said in a re­port.

“Tele­com car­rier re­ports of rel­a­tively weak de­mand for the iPhone 8 stoked th­ese fears.”

Around the world, Ap­ple fans posted im­ages and com­ments on­line Fri­day about how they were plan­ning to get their hands on one of the $1319 (or more) phones. In Hong Kong, the phone ap­peared to sell out less than half an hour af­ter or­der­ing be­gan, with the on­line store there show­ing the phone “cur­rently un­avail­able.” It was a sim­i­lar story across Asia.

In the U.K., the de­vice sold out within min­utes. By mid-morn­ing, cus­tomers were be­ing told they would have to wait four to six weeks be­fore the phone be­came avail­able. And if New York­ers didn’t stay up all night, they were likely out of luck. By early morn­ing on the East Coast, Ap­ple’s web­site was al­ready reg­is­ter­ing a wait of as much as six weeks.

Ap­ple was said to have strug­gled to build enough of its flag­ship hand­set, partly as a re­sult of qual­ity is­sues with sen­sors

Wait­ing sev­eral weeks for ma­jor new Ap­ple de­vices has be­come com­mon. Ship­ping times for the iPhone 6 and iPhone 6 Plus, launched in 2014 and the pre­vi­ous end-to-end iPhone over­haul, ex­tended to as much as four weeks in the hours af­ter be­com­ing avail­able to pre­order.

Ap­ple typ­i­cally takes a few weeks or months to reach a bal­ance of sup­ply and de­mand for ma­jor new iPhone launches.

The iPhone X has a crisper OLED screen with slim­mer bezels, match­ing re­cent de­signs from Sam­sung Elec­tron­ics, in ad­di­tion to a unique fa­cial-recog­ni­tion scan­ner to un­lock the phone rather than us­ing a fin­ger­print. Ap­ple strug­gled to man­u­fac­ture as­pects of the new fea­tures and the iPhone X’s Nov. 3 de­but will be about six weeks af­ter the ar­rival of the iPhone 8, which is a less so­phis­ti­cated de­vice.

“The Ap­ple sup­ply chain was strong this morn­ing as the iPhone X sales are good,” said Al­lan Lin, an as­sis­tant vice-pres­i­dent at Con­cord Se­cu­ri­ties Corp.

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