Apple has been unable to ramp up mass production of its first foldable smartphone, the iPhone Ultra, because of manufacturing quality problems, Nikkei Asia reported. Meeting this year's target would require output of tens of thousands of units a day, but production as of the end of last month stood at only a few hundred units a day — a wide gap. That has fueled expectations of a supply shortage in the early weeks after launch. Analysts also say Apple may struggle to gain a foothold in the foldable market, already dominated by Samsung Electronics, if it cannot secure enough initial volume.
Citing a supply chain manager familiar with the matter, Nikkei Asia reported on the 7th that Apple's quality requirements are so demanding that the company added another round of trial production in August before starting full mass production. "As of the end of last month, average daily output was in the hundreds of units, and the ramp-up is proceeding slowly," the person said, adding that such initial volumes may not be enough to meet market demand.
Apple's standards call for testing under more extreme conditions, a far higher number of fold cycles and greater screen flatness. That is why the device has already run into difficulties during design and trial production. Apple set a target of producing 8 million to 10 million foldable iPhones this year, betting that the new form factor would inject fresh momentum into the market and lift revenue. If the company cannot accelerate the ramp-up, it will fall short of that target and may need longer than expected to meet demand. Apple is increasing output, but the pace remains slow, according to the report.
Another person familiar with the matter said surface flatness and hinge performance are among the specific items where Apple is demanding better yields. "If the current situation does not improve, there is a strong chance inventory will be short when sales begin," the person said.
The iPhone Ultra is Apple's first foldable product. Because the company held off entering the foldable market from its early days, much rides on the success of this first device. Apple watched from the sidelines for years while Samsung Electronics, Google and Motorola competed in foldables. Only after Samsung Electronics built up years of hardware improvements and a customer base for its Flip and Fold lines is Apple bringing out its first model. Taking on a rival that holds the initiative requires a flawless launch, industry watchers say.
The shape of the supply picture is expected to become clearer at a public event. Apple plans to hold an event on the 9th to formally unveil the iPhone 18 Pro, Pro Max and Ultra. A new Apple Watch and Apple Watch Ultra are also expected to be announced, and some observers say new AirPods could be introduced as well. The iPhone Ultra is said to be priced well above $2,500.
Meanwhile, the global smartphone industry is facing unprecedented shortages of memory chips and electronic components amid a massive buildout of artificial intelligence infrastructure. According to IDC's latest forecast, the smartphone market will shrink 16.7% this year, while average selling prices will rise about 27.6% because of the memory shortage.
