In a matter of hours, Apple (NASDAQ:AAPL) will start taking pre-orders for its forthcoming iPhone X, ahead of the Nov. 3 launch. The current state of production for the new flagship device remains heavily debated, though. Bloomberg reported yesterday that Apple may have compromised on Face ID accuracy specifications in order to make the TrueDepth camera module easier to assemble, although Apple publicly disputed the account and called the report "completely false."

Rosenblatt Securities analyst Jun Zhang is now weighing in (via Tech Trader Daily).

Side view of iPhone X

iPhone X pre-orders begin at 12:01 a.m. PDT. Image source: Apple.

Word on the Street

According to Zhang's research note to investors, Apple may have already resolved its bottlenecks around 3D-sensing components. Zhang estimates that Foxconn has increased production rates and is currently pumping out 800,000 to 1 million units per week after implementing a 24-hour production schedule. That may not seem like enough, since it translates into about 4 million units per month at the high end and wouldn't be enough to hit the estimated 20 million units for 2017, but keep in mind that the production rate is constantly improving.

Zhang does not seem to believe the story of Apple compromising on Face ID accuracy, adding: "We note that accuracy requirements are still very high and we no longer believe that 3D sensing is the iPhone X production bottleneck." The analyst says Apple may have been able to address the quality issues by replacing components made by Murata with other suppliers', all without sacrificing spec requirements. LG Innotek and Sharp, which assemble the TrueDepth camera modules, are still struggling with yield rates but have reached satisfactory levels so as not to create choke points.

Like KGI Securities analyst Ming-Chi Kuo, Zhang estimates that there may only be 3 million iPhone X units available for the launch -- which is to say the device will be extremely supply constrained.

Keep an eye on these data points over the next week

With pre-orders about to commence, the next data point that investors will be able to use as a very rough proxy will be shipping estimates. How quickly shipping estimates slip, and how severe those delays are, will be a qualitative indication as to Apple's backlog for iPhone X. Based on early indications of supply and demand, investors should expect those shipping timelines to slip quickly.

The most meaningful quantitative data point will come in the form of Apple's guidance for its fiscal first quarter, which it will provide when it reports fiscal fourth-quarter results a week from today on Nov. 2, the day before the iPhone X launches. The production situation is evolving very quickly, and a lot can change in short order. The forecast that the Mac maker provides next week will be absolutely critical as the most direct insight into the production ramp.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.