Apple Inc's Suppliers Are Gearing Up for Massive iPhone Production

Apple's (NASDAQ: AAPL  ) new iPhone 6 is expected to debut this coming fall, which means production for the device -- and possibly a phablet as well -- will begin this summer. And if the latest reports from Taiwan's Economic Daily News prove true, Apple suppliers are preparing for one of the biggest iPhone productions to date.

The calm before the storm
This week AppleInsider reported Apple's longtime Apple manufacturer Foxconn may add 100,000 workers for iPhone 6 production, representing a 10% increase over the amount of workers for the iPhone 5 and 5s.

On top of the addition of new employees, Foxconn is said to be expanding two of its production lines in order to handle the iPhone orders. Production is expected to start next month.

The uptick in Foxconn employees and expansion of production lines points to the massive anticipation Apple has for its new device. The new iPhone 6 is expected to have a 4.7-inch screen, and a 5.5-inch phablet is also rumored to launch later this year.

So, how many iPhones is Apple expected to sell?

Apple analyst Katy Huberty expects a 5-inch model to push iPhone sales up to 66 million in 2015, compared to an expected 51 million if Apple made no changes to its current iPhone lineup. She said Apple suppliers are expecting a 20% increase in iPhone 6 sales, compared to the launch of the iPhone 5s. As fellow Fool Daniel Sparks pointed out, that could mean a 15% increase in overall iPhone sales.

Foolish thoughts
There's no debating there's pent-up demand for a larger iPhone (or two), so the rumors of massive employee additions and product line expansions probably aren't far off base.

Back in April slides surfaced of Apple admitting, "consumers want what we don't have" when it comes to smartphone screen sizes. Apple looks like it's going to finally bring its screen up to par with the rest of the smartphone industry, and loyal iPhone fans are expected to respond in kind. Huberty thinks 8 out 10 iPhone 6 sales in 2015 will come from existing iPhone customers.

It's hard to imagine a larger iPhone 6 not creating at least some of the demand analysts and the media are expecting. While some skeptics will still bring up lack of innovation at Apple, the company is certainly receiving a lot of buzz for both larger iPhones and a possible iWatch debut. Larger iPhones don't necessarily qualify as an innovation -- considering the screen size will just be bigger -- but Apple releasing an iWatch that pairs with the iPhone certainly does fit the innovation bill, and it could help drive iPhone 6 sales apart from the larger screen.

In addition to that, I think the HomeKit platform debuted earlier this month at Apple's WWDC could definitely help spur sales of the new iPhones. While it's not a feature every iPhone owner will take advantage of, it's clear the company is trying to diversify not only the screen sizes, but what people use its devices for.

With HomeKit and a possible iWatch, Apple will step firmly both into managing devices connected to the Internet of Things and wearable technology. Right now, it seems Apple wants to drive sales of its iPhone by making it the go-to smartphone for managing other less powerful devices -- and for that reason, the iPhone 6 will be a very strong contender.

Apple's next innovation beyond the iPhone
While a new iWatch would put Apple into the wearables segment, it's still unclear how successful such a device could be. But there's one stock that's already firmly in the wearables space, and it's busy making the technology inside some of the world's best wearable devices. To find out how wearable tech will become a huge part of the the technology sector -- and to read The Motley Fool's free report on this one stock -- just click here now


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