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Apple, Inc.’s 5.5-inch iPhone 6 May Be Delayed Into 2015

The signal-to-noise ratio ahead of an Apple (NASDAQ: AAPL  ) iPhone launch typically gets better as we hone in on the launch, but lately it seems that the opposite is happening. In late June, Bloomberg reported that both the 4.7-inch and 5.5-inch iPhone 6 models would launch simultaneously this fall. However, a fresh report from KGI Securities' Ming-Chi Kuo suggests that Apple will need to delay the launch of the iPhone 6 5.5-inch, possibly into 2015.

What's going on here?
According to Kuo, Apple is having issues on two fronts. First, Apple is apparently having issues yielding the in-cell touch panel (this technology contributes to the iPhone's thinness). Next, Apple is allegedly having problems with color unevenness of the metal chassis that houses iPhone 6.

Apparently, these issues aren't isolated to the 5.5-inch model, but according to 9to5Mac it'll be easier for Apple to work through these yield problems for the smaller 4.7-inch model than it will be for the 5.5-inch model.  All told, Kuo believes that these issues could push the 5.5-inch iPhone 6 into the twilight days of 2014 or – more pessimistically – 2015.

What does this mean for investors?
If we assume that this rumor is true, then this weakens Apple's competitive positioning somewhat. A simultaneous launch of the 4.7-inch and 5.5-inch iPhone models would do a fantastic job of covering all of the bases. More to the point, if Apple launches a 5.5-inch iPhone 6 around the same time that Samsung (NASDAQOTH: SSNLF  ) launches its next generation Galaxy Note, it could steal some pretty serious thunder from Samsung's launch and further hit its rival where it hurts.

Further, since the iPhone 6 5.5-inch is likely to command an average selling price premium over the vanilla 4.7-inch iPhone 6, Apple would be able to drive a richer mix, which means higher revenues, and higher operating profits earlier on in the cycle. Launching both simultaneously would be a very good thing for Apple's competitive positioning for the balance of the year.

What can Apple do?
If the larger iPhone 6 really is having production issues, then Apple could paper launch the 5.5-inch variant (i.e. make it available for pre-order) alongside the 4.7-inch model. Doing this is a bit of a double-edged sword as there would be a very real subset of early buyers that would wait for the larger variant. However, it would help to spoil Samsung's party and lead to longer-term share gains for Apple.

Foolish bottom line
At the end of the day, take this report for what it is – a rumor, albeit one from a credible source. Though it would be a disappointment to see Apple delay the launch of the larger iPhone, as that variant could serve to drive meaningful share gains at the high end, it's not the end of the world. The 4.7-inch model will probably be the more popular one, and should even satiate a good chunk of the users that want a larger iPhone.

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Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 15, 2014, at 4:26 PM, mds wrote:

    Why are you guys doing this.

    Lets review:

    1) Larger screen I-Phones are a rumor never confirmed by AAPL

    2) Watches were never confirmed by AAPL

    3) Since many are wise to the rumor game; now the laest is that "we should not expect much from the June Quarter". LOL EVERYONE KNOWS IT WILL BE ANOTHER BLOWAWAY QUARTER.

    4) I will remind reader that the 5S is outselling Samsung's latest and greatest.

    5) Nobody will ever buy Samsung versus waiting for something real and imminent from AAPL. That is a statistical fact.

    Now, instead of admitting it was all lies; it is billed as delays to keep the rumor alive as well as discredit AAPL.

    You can't be late on something that is not and possibly never will be.

    What did AAPL ever say to confirm your irresponsible reporting. Please let us know.

    My thesis is that you are merely writing nonsense to depress the stock and save the thieves from the dreaded $95 naked call bets they placed for Friday.

  • Report this Comment On July 15, 2014, at 4:38 PM, mds wrote:

    The above was not a rhetorical question.

    I really would like answers to my questions; if this is a legitimate forum and not just bad press.

    It does need defending; because from where we all stand it has no merit or substance. It was all built on speculation.

    PLEASE....... LET US KNOW????

  • Report this Comment On July 15, 2014, at 5:16 PM, mds wrote:

    C'mon Ashraf....give us an answer.


  • Report this Comment On July 15, 2014, at 8:27 PM, marcosh wrote:

    Is this a joke? Do industry analysts like Kuo ever have any idea what they are talking about? Is there any confirmation of the sizes (or more importantly the resolutions) of any larger iPhone? Give me a break - this entire post should be deleted. Security analysts have no ideas and no sources about Apple products. They're still predicting an Apple TV yearly.

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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