Order the iPhone Duo and wait three months for delivery... A sign of a hit or a supply crunch?

[Financial News] Interpretations differ over the delay of delivery for Apple Inc.'s first foldable smartphone, the “iPhone Duo,” until January next year. Some see it as a sign of a hit, with preorders rising quickly, while others say it reflects early production problems that have left supply unable to keep up with orders. Since customers will not be able to buy the phone in stores on its official launch day, some say it is better to look at initial supply and the pace of production ramp-up rather than conclude that it is a hit based on delivery delays alone.
According to the information technology (IT) industry on the 22nd, the iPhone Duo will go on sale officially in South Korea and other markets on the 23rd. But customers will not be able to walk into an Apple Store and buy the product on launch day. Apple Inc. says on its South Korean website that in-store purchases of the iPhone Duo are unavailable. Customers must reserve a pickup to collect the product at a store, and the restriction on walk-in purchases without a reservation reportedly applies in South Korea and Japan.
The Apple Online Store lists January next year as the estimated delivery date for orders. On the 16th, when preorders began, delivery dates for every color and storage configuration were pushed back to next year in about 30 minutes.
The delivery delay shows strong initial interest in the product, but it is not necessarily a reliable measure of actual sales. Apple Inc. said preorder demand was exceptional but did not disclose preorder sales in South Korea or the initial supply volume.
Analysts also say initial supply may be limited by production constraints. Meritz Securities previously assessed that yield problems with key components, including the iPhone Duo's hinge and ultra-thin glass (UTG), as well as during final product assembly, were making it difficult to ramp up production. Supply constraints for some materials were also cited as a burden.
Because a foldable phone's screen and hinge fold and unfold together, precision in aligning and assembling the components is crucial. A low yield means more components and labor are needed to produce the same number of finished units, making it difficult to quickly increase output, according to reports. 
The possibility of production disruptions was raised even before preorders began. Foreign media, including China's Jiemian News, previously reported, citing a source in Foxconn's supply chain, that as of the 17th of last month the iPhone Duo's final assembly yield was slightly above 60%. This did not mean that production preparations were 60% complete; rather, it meant that in the final assembly process, around 60% of the units put into production were judged to be good products. Apple Inc., however, has not made an official statement on the final assembly yield.
Under pressure, Apple Inc. is expanding its materials and components supply chain in the United States. It recently said it would expand its supply partnership with U.S. titanium producer Perryman Company. The deal involves investing up to $100 million (about 133 billion won) over the next three years to secure titanium for its products, including the iPhone Duo.
The iPhone Duo's retail price in South Korea ranges from 3.29 million won for the 256GB model to 5.09 million won for the top-tier model. The rush of orders at the start of preorders despite the high price points to strong initial interest in the product. However, some say the market's actual response will depend on whether orders continue once supply stabilizes and whether user reviews after launch lead to additional purchases.
Industry observers expect the pace at which additional units become available after the official launch to shape the early sales trend. They say delayed deliveries amid limited initial supply should be distinguished from whether the product achieves broad popularity.
An industry source said, “The longer initial delivery estimates may be due to a rapid influx of preorder demand, but we also need to consider that production may be insufficient.” The source added, “Until the initial supply volume and the pace of additional production are known, it is difficult to determine whether the product is a hit based on delivery delays alone.”
[email protected] Yoon Hong-jip Reporter