Prepping 4.7-Inch and 5.5-Inch Screen Sizes, Apple Tells Its Suppliers to Gear Up for a Record Initial Production Run

Apple Inc.  is preparing for its largest initial production run of iPhones, betting that larger-screen models will lure consumers now attracted to similar phones from Samsung Electronics Co.and others.

The Cupertino, Calif., company is asking suppliers to manufacture between 70 million and 80 million units combined of two large-screen iPhones with 4.7-inch and 5.5-inch displays by Dec. 30, according to people familiar with the matter.

Its forecast for what is commonly called the iPhone 6 is significantly larger than the initial order last year of between 50 million and 60 million versions of the iPhone 5S and 5C—which had a display measuring 4-inches diagonally, these people said. Both of the coming models are expected to feature metal cases similar to the iPhone 5S and likely come in multiple colors, these people said.

Apple stuck with smaller displays on iPhones even as rival smartphone makers rolled out bigger screens and customers clamored for larger phones. Demand for larger-screen smartphones boosted Samsung, which started offering a 4.8-inch display in its Samsung Galaxy S models in 2012 and introduced an array of bigger phones.

Apple is scheduled to report its fiscal third-quarter results on Tuesday and provide a financial outlook for the current period ending Sept. 28. Historically, Apple has released a new iPhone in mid-September.

Analysts are forecasting Apple will report sales of about 35.9 million iPhone units for the three months ended June 30. That would be up about 15% from a year earlier.

For Apple, one possible hiccup with the larger screen is that display makers for the new iPhones are struggling to improve the production of the larger 5.5-inch screens, people familiar with the matter said. The production is complicated because the displays are using in-cell technology, which allows the screens to be thinner and lighter by integrating touch sensors into the liquid crystal display and making it unnecessary to have a separate touch-screen layer.

source: http://www.online.wsj.com