According to a report from Nikkei Asian Review, Apple could face supply shortages of the iPhone 7 at launch as the publication claims Apple suppliers are facing low yield rates for certain components.

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Apple may need to contend with a supply shortage of the soon-to-be-released new model of its iPhone during the first round of the rollout, due to problems with faulty components… “If Apple sticks to its launch schedule from last year, there may not be enough supply at the beginning, as some suppliers are still trying to fix low yield rates of their components,” an industry source familiar with the issue said.

The report mentions “defects in the waterproof speaker and dual-camera module,” hardware rumored to be included in the next iPhone, as main reasons for analysts recently lowering expectations for the device.

The publication’s sources added that orders from Apple to suppliers for processor chips could drop “up to 15% compared with last year,” and analysts expect a similar decline in orders for iPhone displays. “Apple’s panel orders for new iPhones are dropping around 20% year-over-year, and that leaves major suppliers such as Japan Display hungry for more orders,” said Ellike Chen, an analyst at Chinese research company Sigmaintell.

The supply chain chatter, the report notes, has at least some analysts cutting their estimates for shipments during Apple’s expected launch of the next-gen iPhone next month.

The news comes as several of Apple’s key suppliers have reported declines this year attributed to a drop in overall iPhone orders. Apple’s main supplier Foxconn reported a 31% drop for Q2 net profit, while a report from earlier this year detailed how Foxconn, Pegatron & other key Apple suppliers have reportedly been under pressure as the company attempts to squeeze margins on components. 

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