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Apple Leases Equipment To Suppliers To Guarantee iPhone 8 Parts And Avoid Production Issues

15 July 2017, 8:06 am EDT By Carl Velasco Tech Times
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Apple unveils iPhone 8, iPhone X and 4k-streaming Apple TV
Apple has reportedly bought its own production equipment, leasing them to suppliers to manufacture iPhone 8 components. The news comes as the company faces rumors of production delays and difficulties.  ( Gonzalo Arroyo Moreno | Getty Images )

As a way to produce circuit boards for the upcoming iPhone 8, reports now say Apple just bought expensive production equipment to lend to suppliers, meaning Apple doesn't plan on using said equipment directly.

Apple Purchases Equipment To Speed Up iPhone 8 Production

Instead, the Cupertino, California, tech firm will lease it to component suppliers to ensure it can get the required components for iPhone 8 production. The news comes as an upswing for Apple amid previous rumors of production delays and difficulties.

As The Korea Herald reports, the equipment cost Apple "tens of millions of dollars." For the record, Apple doesn't have its own plant for equipment installation and has already tapped three suppliers to do the job. Apple's suppliers will use the equipment to produce circuit boards.

Apple bought the equipment after one of its three suppliers withdrew from the deal. Reports say two Korean companies, Interflex and Youngpoong Electronics, will produce the components moving forward.

Why the said supplier backed down from the deal remains a question, though some sources say the company may have felt a pinch on the tricky production and Apple's strict quality requirements, in addition to low profitability.

With one supplier less, Apple decided to ensure the remaining suppliers can meet its requirements and capacity. According to The Korea Herald's source, Apple is allegedly supporting the two companies to beef up production.

This year alone, Apple is expected to order 100 million units of the circuit boards or, more specifically, the RFPCB, which is reportedly harder to make than conventional rigid or flexible PCB.

iPhone 8 Production Woes

Rumors say Apple is facing difficulty producing some of the iPhone 8's components, among them the 3D sensor and the display lamination process. Several analysts believe these components will delay production. Famed Apple analyst Ming-Chi Kuo believes production could be delayed up to two months, meaning Apple could initially move limited units until it meets demand by late 2017 or early 2018.

That's assuming, of course, if there will be overwhelming demand for the iPhone 8. For so long Apple's customers have clamored for the iPhone — iteration after iteration. But some analysts believe the iPhone 8 won't have compelling-enough features to convince users to upgrade. They think it has to do more beyond having an OLED screen to attract purchases. Time, as always, will tell.

Check out our article to read everything we know about the iPhone 8 so far.

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