New iPhone Production Hampered by OLED Screen Issues: Report

Manufacturing problems with the OLED displays in the upcoming new iPhones from Apple are leading to lower-than-expected phone production inventories and could mean a shortage of the devices as the December 2017 holiday gift-giving season approaches.

The OLED issues, and related problems trying to incorporate fingerprint sensors into the new phones, were reported in a Sept. 7 story by The Wall Street Journal, based on information from people with knowledge of the complications. The latest iPhones, including an expected 10^th anniversary special edition of the industry-changing phones, are expected to be unveiled Sept. 12.

Apple has been having manufacturing problems with the upcoming phones since earlier this summer, when difficulties arose in trying to embed the new fingerprint scanners into the new OLED displays, the story reported. The problems have not been resolved, which caused Apple to abandon the fingerprint scanners for now and go back to password protection for the phones. A new facial-recognition feature is expected to be available in the latest devices.

The complex manufacturing processes needed for the new OLED displays have also been problematic and are contributing to the production issues and lower-than-expected volumes of phones waiting to be shipped, the report added.

All of this likely means that normal iPhone shortages when new models are released will be exacerbated by the production problems. The phones are expected to be available for sale starting Sept. 22.

“The glitches, which occurred early in the manufacturing process, set back the phone’s production timetable by about a month,” the Journal story reported.

Apple is expected to introduce three new iPhones as well as several new Apple Watch models at its Sept. 12 launch event. One of the new iPhones will likely be a more costly 10^th anniversary edition commemorating the introduction the first ground-breaking iPhone in September 2007.

In July, rumors circulated that starting prices for the next iPhones could rise in price to as much as $1,200, which is substantially higher than current iPhone 7 prices. Prices of some of the upcoming iPhone models—which could be called iPhone 8, but more likely will be labeled with extensions of the iPhone 7 naming hierarchy—could even hit $1,399, those earlier reports stated.

The expected higher prices could help differentiate the newest iPhones from existing models while also giving the company the opportunity to sell the handsets at its existing 35 percent margins and in measured quantities based on available supplies of components. The original iPhone 7 prices started at $649 for a 32GB base iPhone 7 and rose to $969 for a 256GB iPhone 7 Plus.

The upcoming iPhones have been the focus of rumors for months as analysts and Apple watchers have speculated about the features that Apple has built into the handsets, how much the new phones will cost and whether they will have what it takes to trigger a new round of upgrades.

Apple will probably keep older iPhone 7 models in its lineup as well with lower price tags, as it has done in the past.

Apple’s iPhone 7 models, which were released in 2016, were the first iPhones to drop a physical headphone jack in favor of wireless ear buds.

The iPhone 7 models, which currently start at $649, are water- and dust-resistant, include 12-megapixel cameras with dual lens cameras in the iPhone 7 Plus model and the A10 Fusion processor. The handsets come in 32GB, 128GB or 256GB versions. 

The iPhone 7 has a 4.7-inch Retina touch-screen display, while the iPhone 7 Plus uses a 5.5-inch Retina touch-screen display. Both handsets offer 4K video recording capabilities as well as auto-focus and optical image stabilization features.