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Apple may be hit with supply shortage for iPhone 7 and iPhone 7 Plus

29 August 2016

A new report originating from Apple's supply chain hints that the company "may need to contend with a supply shortage" for the iPhone 7 and iPhone 7 Plus. The report cites vague issues with "faulty components" as the central problem. Similar stories had emerged during the launch of the new iPhone nearly every year, stemming from Apple's annual late-summer production ramp-up prior to the September iPhone reveal.

MacRumors reported, citing an industry insider, "If Apple sticks to its launch schedule from last year, there may not be enough supply at the beginning, as some suppliers are still trying to fix low yield rates of their components." 

Apple is reported to be sticking to its launch schedule from last year, which could cause low supply "during the first round of the rollout," resulting in low yield rates, higher costs for manufacturers, and subsequently less volume to deliver to customers.  According to Yuanta Investment Consulting analyst Jeff Pu total iPhone 7 builds would be 10 million less than that of the iPhone 6s last year.

Meanwhile, Apple is planning a new iPhone feature for Japan that would allow users to pay for mass-transit rides with their smartphones rather than physical payment cards. A future iPhone would include technology called FeliCa, a mobile tap-to-pay standard in Japan developed by Sony Corp, people familiar with the matter said.

With the chip, customers in Japan would store their public bus and train passes on their iPhones. Users would then need to tap their phones against the entrance scanners instead of using physical cards. While the FeliCa chip is the standard technology underlying the service, there were many different providers of transit payment cards based on the type of transit and areas within Japan.

The Near Field Communication technology powering Apple's mobile-payments service, Apple Pay, dominates in North America, Europe and Australia, but the FeliCa standard dominates Japan which has a penetration of 1.9 million payment terminals, according to the Bank of Japan.

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