Apple’s Big IPhones Said to Start Production Next Month

June 24 (Bloomberg) -- Apple suppliers in China will begin mass production of its largest iPhones ever next month, according to people familiar with the plans, as the smartphone maker faces increased competition. Rosenblatt Securities Senior Analyst Brian Blair and Bloomberg Businessweek’s Peter Burrows speak on “Bloomberg West.” Blair owns no stock in Apple. (Source: Bloomberg)

Apple Inc. (AAPL) suppliers in China will begin mass production of its largest iPhones ever next month, according to people familiar with the plans, as the smartphone maker faces increased competition.

Apple is ramping up on two bigger devices, said the people, who asked not to be identified because the plans are private. One model will have a 4.7-inch display, compared to the 4-inch screen of the current iPhone 5s, that may be available to ship to retailers around September, said two of the people. A 5.5-inch version is also being prepared for manufacturing and may be available at the same time, the people said.

Apple is getting ready for its annual unveiling of new iPhones after rivals including Samsung Electronics Co. and HTC Corp. released smartphones with displays that are as large as 5.7 inches. Consumers have been gravitating toward larger-screen devices -- in China, 40 percent of mobile gadgets based on Google Inc.’s Android operating system that were sold in 2014 had display sizes of more than 5 inches, according to an estimate from Forrester Research.

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Chief Executive Officer Tim Cook is under pressure to reignite Apple’s sales growth and the iPhone, which generates more than half of the company’s annual revenue, remains his chief weapon. Last year, the smartphone produced $91 billion in revenue alone, more than the total sales of Oracle Corp., Yahoo! Inc., Facebook Inc. and Twitter Inc. combined.

Photographer: Angel Navarrete/Bloomberg

An employee wears a blue Apple-branded t-shirt and name badge during a media briefing at Apple Inc.'s new Spanish flagship store on Puera de Sol square the day before opening to the public in Madrid, Spain. Close

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Photographer: Angel Navarrete/Bloomberg

An employee wears a blue Apple-branded t-shirt and name badge during a media briefing at Apple Inc.'s new Spanish flagship store on Puera de Sol square the day before opening to the public in Madrid, Spain.

Natalie Kerris, a spokeswoman for Cupertino, California-based Apple, declined to comment.

Rounder, Thinner

Apple shares fell less than 1 percent to close at $90.28 in New York, leaving them up 13 percent this year.

The new iPhones will also be rounder and thinner than previous models, said one of the people. Production of the 5.5-inch model is more complicated than the smaller version, resulting in lower production efficiency that must be overcome before manufacturing volume can be increased, said the person.

Apple is developing new iPhone designs including bigger screens with curved glass and enhanced sensors that can detect different levels of pressure, Bloomberg News reported in November. Called 2.5-dimension glass, the material lets manufacturers taper the edges of the screen where the bezel meets the frame of a smartphone.

Earlier this month, Apple also introduced new features for the software powering the iPhone and iPad in a bid to add more functions and utility to the devices. The company’s new iOS 8 mobile software has capabilities that enable people to use the gadgets to monitor their health and remotely control locks and lights for their home.

Photographer: Brent Lewin/Bloomberg

A man uses a Samsung Electronics Co. Galaxy S5 smartphone, featuring a 5.1" display, outside a Samsung store in Hong Kong. Apple is getting ready for its annual unveiling of new iPhones, with bigger screens beyond the 4 inches of its current iPhone 5s after rivals including Samsung Electronics Co. and HTC Corp. released smartphones with displays that are as large as 5.7 inches. Close

A man uses a Samsung Electronics Co. Galaxy S5 smartphone, featuring a 5.1" display,... Read More

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Photographer: Brent Lewin/Bloomberg

A man uses a Samsung Electronics Co. Galaxy S5 smartphone, featuring a 5.1" display, outside a Samsung store in Hong Kong. Apple is getting ready for its annual unveiling of new iPhones, with bigger screens beyond the 4 inches of its current iPhone 5s after rivals including Samsung Electronics Co. and HTC Corp. released smartphones with displays that are as large as 5.7 inches.

To contact the reporters on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net; Michael Tighe at mtighe4@bloomberg.net Reed Stevenson

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