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The iPhone X will likely be in 'tight supply' as preorder demand could top 50 million

Sep 25, 2017, 21:16 IST

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KGI Securities analyst Ming-Chi Kuo warned that iPhone X supply will be tight until the first half of 2018 in an Apple Insight note issued to investors on Monday seen by Business Insider.

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Apple released new iPhone 8 models over the weekend, but the iPhone X will be the most expensive and most technologically advanced iPhone when it hits stores on November 3.

There's going to be a lot of demand for iPhone X units when they first go on sale. Kuo estimates that preorders may surpass 40 million to 50 million units iu

"We think Apple's (US) core fans and some iPhone 6 and 6s users are willing to pay a hefty price for this upgraded device," Kuo wrote.

Because demand will be so high, there's a good chance that it will be hard to find one. Apple's factories won't start building large amounts of the new $999 phone until mid to late October, according to the report. The bottleneck in production is likely related to Apple's new front-facing "TrueDepth" camera, which has a "complex struction" and will "therefore be harder to achieve mass production."

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Kuo, who is known for being tapped into the Asian electronics industry, even says that some of Apple's suppliers have reallocated resources from the iPhone 8 to making parts for the iPhone X.

At some point, Apple will be able to make enough iPhone X units to satisfy worldwide demand. But increasingly, its looking like that point will happen at some point in the first half of Apple's fiscal 2018, which begins in October.

Here's the takeaway from the note seen by Business Insider:

Some investors are concerned about shipments of iPhone X components in 3Q17. However, as we expect shipments will ramp up in October, we think the recent correction of Apple and Apple supply chain shares represents a good entry point.

Taiwanese companies that count Apple as a customer that Kuo likes include Hon Hai, Largan, TSMC, Chunghwa Precision, Tong Hsing, and GIS.

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