iPhone rumour rollup for the week ending May 9

Why July is inconsolable, and what about those fingerprint sensors

The iOSphere was rocked by iPhone 6 Sticker Shock, at about 10+ on the Richter scale, when one "report" this week predicted that the Next iPhone will cover its 5.44-inch display with a synthetic sapphire sheet that will boost the phone's unlocked price to $1,285.

Also this week, how anonymous rumours that iPhone 6 will ship in "third quarter" are translated into "August" and "September", leaving July inconsolable. And the iPhone 6 fingerprint sensors are now shipping which means ... well, it's not clear what that means but it's an iPhone Fact.

You read it here second.

iPhone 6 with 5.44-inch sapphire screen will cost $1,285

Talk about a bummer. And even if you could afford it, Apple is only going to build 10 million of them over the phone's life-cycle of two to three years, so the chance of you actually finding one are remote, given that Apple currently is selling roughly 180 million iPhones yearly based on sales over the last two quarters.

This rumor originated on the Chinese Weibo site, though the link posted by various Western sites leads to a page that now seems to be unavailable for translation.

G for Games was one of the first to trumpet the, frankly, unbelievable "news," with the headline "5.44-inch iPhone 6: 10 Mil. Units Life-cycle; Sapphire Pretty Damn Expensive (Rumor)."

+ More: What the rumor mill expects from iOS 8  | History: 5 years ago they said the iPhone would be a flop +

"The latest rumors now suggest that the larger iPhone 6 will in fact pack a 5.44 inch display, and that, due to the high production costs, the smartphone might be produced in smaller quantities," wrote Mihai Matei, apparently without pausing to wonder about the feasibility of expanding the iPhone brand by selling fewer phones.

"These latest reports suggest that the sapphire screen costs around 1743 yuan (or $280), which would raise the final cost of the device to about 8000 yuan (or $1,285) at least in China," writes Mihai Matei. "At the moment, the 16 GB iPhone 5S costs 5288 yuan in China ($850), whereas the beefier 64 GB variant is retailed at the price of 6888 yuan (or $1106)."

The $280 price tag for the sapphire cover seems preposterous.

The current Corning Gorilla Glass cover for today's 4-inch iPhone models is estimated by a materials analyst at one market research firm to be $3 per sheet, which would make the (admittedly much larger) 5.44-inch sapphire cover nearly 100 times more expensive. At that rate, you're treating sapphire as a gemstone, not an industrial material.

Perhaps the best sapphire screen estimates have been developed by Yole Development, a market research firm headquartered in Lyon, France, as Network World reported in the recent "How Apple's billion dollar sapphire bet will pay off."   

"We modeled a $17 cost initially for the finished part [i.e., for an iPhone display cover]," says Eric Virey, senior market and technology analyst for LED devices and materials at Yole. Adding in margins for the various supply chain partners, "We expect Apple to initially pay around $20 per part," he says. "That's a significant increase compared to an equivalent part made of Gorilla Glass, which should cost around $3."

If Apple releases sapphire for only a high-end iPhone model, and not for the c' variant, it could possibly pass the cost to the buyer in the form of a higher price. Or Apple could absorb the costs itself, reducing the iPhone's margin and hence its profitability at least temporarily. Virey notes that some of the added costs could be offset by savings in warranty costs due to fewer cracked iPhone screens that have to be replaced.

Apple is treating sapphire as a strategic material, in quantities too vast to be used by an "iWatch," no matter how many were sold. But at this point, it is completely unclear whether Apple intends to introduce sapphire covers in 2014 or 2015 products, or whether they might initially be limited to some kind of "super premium" iPhone with a higher price tag.

AppAdvice's Bryan Wolfe dismissed the GForGames account. "While it is entirely possible that Apple would charge this amount for an iPhone 6 phablet, I don't buy it," he wrote. "Just last week, for example, the company dropped the price for the entry-level MacBook Air to $899. This compares to $849 for an unlocked 64GB iPhone 5s."

But that's not a very convincing line of reasoning. Few, if any, buyers are going to conclude that, because the MacBook air is just $50 more than an unlocked 5s, it's a better buy. That's because they "hire" the phone for a different job than the laptop, and most iPhones are sold (at least in the U.S.) with some kind of carrier subsidy.

iPhone 6 will be available in August

Taiwan's Economic Daily News reports that Apple will unveil and release an iPhone 6 model with a 4.7-inch screen in August, or at least one month earlier than expected, according to a rehash of that story by Reuters.

No link was provided to the EDN story and The Rollup couldn't find one to the Chinese language original. Founded in 1967, the Economic Daily News was the first economic and business newspaper in the Republic of China, covering local, regional and international economic and financial news, currently with a circulation of about 368,000.

EDN based its reporting on "unidentified supply-chain sources," according to Reuters' Michael Gold.

Also in the story, apparently from the same sources: Apple will release a 5.5-inch or 5.6-inch model in September; and that 80 million iPhone 6 handsets would be "produced" in 2014. Presumably that is a forecast of how many units will be assembled, but not necessarily sold.

Once again, the predictions of two different sizes for the new iPhone raise more questions than they answer. Apple segmented the iPhone line for the first time in 2013, when it introduced the lower-priced, plastic-bodied 5c along with the 5s, both with 4-inch displays. Contrary to widespread belief, the limited credible data we have about the 5c indicates that it has achieved the goals Apple apparently set for it. [See "The great 'iPhone 5c is a failure' freakout: Getting the few facts available wrong."]

Will Apple continue to offer a 4-inch model? Despite all the frenzy over how Apple is missing out on a huge chunk of the market, remains a hugely successful global seller: in the last two quarters, Apple has sold nearly 95 million 4-inch smartphones. Or will it transition both the flagship 5s and the mid-range 5c to larger screens, and will those larger screens be the same size or different? Will this larger screen mean a price hike? Will a still-larger iPhone product (a 5.5-inch model, for example) be offered as a third iPhone option, priced yet higher?

iPhone 6 will be available in September

Here's the headline from the anonymous post AppleInsider: "Rumor: Apple supplier Pegatron nets orders for 4.7-inch 'iPhone 6,' to ship in September."

To AppleInsider this is variously a "rumor," "rumblings" and a "report."

"A report from Taiwan's Commercial Times on Tuesday claims Pegatron's 15 percent share of upcoming 4.7-inch iPhone 6 orders is in addition to continued manufacturing of current models like iPhone 5C and 4S," according to the post, which does include a link to the original Chinese language post.

When The Rollup copied and pasted the hanzi into Google Translate, the one paragraph actually referencing the iPhone 6 is this: "Apple's supply chain rumors, Apple will deliver a 4.7 -inch iPhone in the third quarter, the market is also optimistic about the size of enlarged iPhone, expected to create a new wave of buying boom, and the master also won about 15% of new iPhone orders, is expected to begin in September of goods, coupled with the old iPhone 4S, iPhone 5C, estimated this year's iPhone Pegatron point total shipments of 50 million units, compared to 3,500 million units last year, a significant growth of 40%."

So there is no "report." It's simply a summary of "supply chain rumors." The "third quarter" refers to the July-August-September period, not "September" as AppleInsider asserts.

In other words, nobody knows when Whatever-it-is actually will be announced or available.

iPhone 6 fingerprint sensors now shipping

Let's face it: this is hardly something to make one's pulse race. The Touch ID fingerprint sensor was introduced for the higher-end iPhone 5s last fall, but not for the lower-priced, plastic-bodied iPhone 5c. So the belief and expectation that iPhone 6 will keep Touch ID doesn't really rise to the level of yawnability.

But that didn't stop sites like MacRumors from declaring that, as Richard Padilla writes, "Apple supplier Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly provided the first batch of Touch ID fingerprint sensors to be used in the iPhone 6, iPad Air 2 and iPad Mini 3...."

OK, so Touch ID being extended to the iPads is different.

The iOSphere rumor amplification is based on the first origination at what Padilla describes as a "component information website" called cecb2b.com and then, again, picked up by GForGames

The Rollup's Google Translate version of original Chinese: "News from Taiwan, said the industry, TSMC has begun in mid-April to provide fingerprint sensor assembly for Apple iPhone 6, iPad Air 2, the third generation iPad mini, back-end services outsourced to Xintec, Suzhou Jing Fang two semiconductor manufacturers. According to informed sources pointed out that mainland China, Suzhou Jing Fang semiconductors, TSMC has delivered the first batch of the product."

Give whatever credibility you want to "informed sources."

Mashable added what passes for "context" in the iOSphere. "A report in January noted that TSMC would begin production on the sensors sometime in the second quarter of this year with a new 12-inch fab processing method, however a report in February stated that TSMC would be using the same 8-inch fingerprint sensor processing method that was used for the iPhone 5s."

Wow. Apple is going to keep using the same 8-inch fab processing method!

Using TheRollup Translate service we come up with: "nobody knows what's going on."

John Cox covers wireless networking and mobile computing for Network World.Twitter: http://twitter.com/johnwcoxnwwEmail: john_cox@nww.com

Read more about anti-malware in Network World's Anti-malware section.

Tags Appleconsumer electronicsNetworkingsmartphoneswirelessanti-malware

More about AppleCorningGoogleReuters AustraliaSapphireTaiwan Semiconductor ManufacturingTSMC

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