Apple’s iPhone X faces production, quality challenges before November 3 launch
As of early fall, it was clearer than ever that production problems meant Apple Inc wouldn’t have enough iPhone Xs in time for the holidays.
As of early fall, it was clearer than ever that production problems meant Apple Inc wouldn’t have enough iPhone Xs in time for the holidays. The challenge was how to make the sophisticated phone—with advanced features such as facial recognition—in large enough numbers. As Wall Street analysts and fan blogs watched for signs that the company would stumble, Apple came up with a solution: It quietly told suppliers they could reduce the accuracy of the face-recognition technology to make it easier to manufacture, according to people familiar with the situation.
With the iPhone X set to debut on November 3, we’re about to find out whether the move has paid off. Some analysts say there may still be too few iPhone Xs to meet initial demand. Ming-Chi Kuo of KGI Securities predicts Apple will have two to three million handsets available on launch day and 25 million to 30 million units for the holiday quarter, down from his previous forecast of 40 million. For comparison, Apple sold 78 million phones during the same period last year, although that included all models.
Apple is famously demanding, leaning on suppliers and contract manufacturers to help it make technological leaps and retain a competitive edge. The company’s decision to downgrade the accuracy of its Face ID system—if only a little—shows how hard it’s becoming to create cutting-edge features that consumers are hungry to try. And while Apple has endured delays and supply constraints in the past, those typically have been restricted to certain iPhone colors or less important offerings such as the Apple Watch. This time the production hurdles affected a 10th-anniversary phone expected to generate much of the company’s revenue. Apple declined to comment.
About a month ago, Foxconn Technology Group pulled as many as 200 workers off an iPhone X production line. Apple was struggling to get sufficient components for the phone and needed fewer people to put it together. The main culprit, the people said, was the 3-D sensor that recognizes faces and unlocks the handset. Foxconn declined to comment. The sensor was always going to be a major technical challenge. Until the iPhone X, the most significant deployment of the technology was in Microsoft Corp’s Kinect controller, which the Xbox console used to detect a gamer’s movements. But the Kinect was the size of a large book, and Microsoft sold just 24 million units of the controller over two years, a far easier production challenge than the one confronted by Apple, which sells more than 200 million iPhones a year.