Apple suppliers reject speculation of iPhone 5S delay

TAIPEI - Suppliers yesterday rejected reports that the release of Apple's iPhone 5S handset may be delayed, saying the product will be launched on-schedule in September or October.

Following these reports, shares of numerous Taiwan-based companies in Apple's supply chain, including Pegatron, Hon Hai Precision Industry Co., Largan Precision Co., Simplo Technology Co. and TPK lost ground during trading yesterday. Most notably, Pegatron shares lost NT$3.55 (S$0.15) or 7 per cent, the maximum intraday movement, following a downgrade by Merrill Lynch.

Recent reports have attributed Apple's rumoured two to three-month delay in introducing the latest iteration of its popular handset to a switch to a larger 4.3-inch screen as well as yield rate woes for several key components.

However, Apple suppliers denied the hardware specification changes reports.

In addition, according to Apple observers, the iPhone 5 and its 5S reiteration represent the last handset model personally approved by company founder and CEO Steve Jobs before his passing. Drastic hardware specification changes are more likely to take place on the iPhone 6 as opposed to the current generation, said Apple observers.

Nevertheless, Apple's entry into the mid-range market, in the form of a low-down iPhone variant, will likely see a drastic departure from convention, said Apple observers. Facing increasing competition from other handset makers, Apple is poised to contest the mid-range market by following the trend of employing larger screen sizes and lower costing plastic casing. For now, drastic hardware specification changes are more likely to occur on its lower-priced variant, or the next generation of iPhones, said Apple observers.

Very little change is expected for the iPhone 5S, apart from moderate feature updates in computing and graphics processor.

Foreign institutional investors stated that the low-cost iPhone variant has entered trial production, ahead of the upcoming iPhone 5S. Shipping volume in the third quarter for the low-cost variant is expected to reach 30 million to 35 million units, said institutional investors.

Credit Suisse Securities analysts predict that shipping volume for Apple handsets to reach betwee 35 million to 40 million units, with half of the figure represented by its low-cost variant. For the fourth quarter, analysts predict shipping volume for iPhones and its low-cost variant to reach between 45 million and 50 million units.