AAPL Heads For Third Weekly Gain — But Foldable iPhone Is Reportedly Stuck At ‘A Few Hundred’ Units A Day

Apple is racing to scale foldable iPhone production ahead of its Sept. 9 debut as tight quality controls and memory shortages threaten to constrain supply.

• Apple is making only a few hundred foldable iPhones daily, Nikkei Asia reported.
• The foldable iPhone could drive a new premium upgrade cycle.
• The Sept. 9 event marks John Ternus’ first major launch as CEO.

Initial production of Apple's long-awaited foldable iPhone is currently limited to only a "few hundred" units a day, mainly because of the company's extremely high quality control standards, according to a report in Nikkei Asia on Friday.

The U.S. company is working hard to ramp up output, the report said, citing sources.

"Apple has very high quality requirements and added an extra trial run in August ahead of actual production. However, production is ramping up slowly, with output currently at only a few hundred units a day in late August. That initial volume could be challenging to meet market demand," one supply chain manager with knowledge of the matter told Nikkei Asia.

Apple shares are up 2.7% so far this week and heading for gains for a third consecutive week. The stock dropped 0.3% in Friday’s premarket trading.

Apple has targeted production of 8 million to 10 million foldable iPhones this year, the Japanese newspaper had reported earlier. However, it could fall short of its production target unless it can ramp up output more quickly. 

Normally, tens of thousands of phones would need to be produced each day to meet the planned production goal for the foldable iPhone, industry executives told Nikkei Asia.

"The surface flatness and the performance of the hinge are among the details where Apple is asking for better production yields," another person with knowledge of the situation was quoted as saying.

iPhone Fold An Important Milestone For Apple

The foldable iPhone is a major launch for Apple as it would mark the company’s entry into a smartphone category that rivals Samsung and Huawei have been developing for years. 

More importantly, the new form factor could create a fresh premium upgrade cycle for the iPhone, expand Apple’s addressable market and provide a new growth driver for its flagship product at a time when the global smartphone market is under pressure. 

The Sept. 9 event will also be significant as the first major product launch under new CEO John Ternus, who officially took over from Tim Cook on Sept. 1. 

Ternus, a longtime Apple hardware executive, has already described the upcoming launch as major. 

Apple stock has also been gaining momentum into the event after a choppy stretch. Shares closed up 1% on Thursday and are inching toward reclaiming their record-high levels. 

Apple: Memory Shortages Already Plaguing Smartphone Industry 

The situation comes on top of another issue plaguing phone makers: the global smartphone industry has been hit by unprecedented shortages of memory and other electronic components amid the massive buildout of AI infrastructure. 

The smartphone market is set to decline 16.7% this year, while the memory shortage will push up the average selling prices for smartphones by around 27.6%, according to IDC. 

Apple's global market share increased to 20.2% in the April-to-June quarter, compared with 16.3% at the same time last year, IDC's data showed.

To optimize memory allocation and marketing resources, Apple is also focusing on its three most premium iPhone models this year, while the launch of the standard iPhone has been pushed to next spring, Nikkei Asia earlier reported.

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