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The BeatsX Delay Could Signal a Bigger Problem for Apple

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BeatsX costs $150

Apple (AAPL) finally released the highly anticipated BeatsX earphones on February 10, 2017, after delaying them for several months. BeatsX retail for $150 and will be a source of incremental revenue for Apple.

The company reported revenue of $78.4 billion in fiscal 1Q17, up from $75.9 billion in the same period in fiscal 1Q16. Let’s take a look at Apple’s quarterly revenue trend.

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BeatsX and AirPods enter market late

Apple announced its BeatsX earphones and AirPods wireless earphones at the same time it unveiled the iPhone 7 in September 2016. BeatsX and AirPods were supposed to be released in fall 2016, but they were delayed, with AirPods only coming in December and BeatsX coming much later.

Is Apple facing production problems?

Though the delayed release of BeatsX may suggest that Apple took its time to carefully develop and test the product before releasing it on the market, it could also signal a serious underlying production problem. 

Talks of Apple products being delayed have become common in recent months. Various supply chain rumors cited by the blog Mac Otakara and others have hinted that Apple may or may not release a refreshed line of iPads in March 2017, with some saying that the company could push the release date to the back half of 2017.

Both BeatsX and AirPods are powered by W1 chips. The problem with securing enough supply of the chip may have caused the release delays. If Apple is working on significant upgrades in the next iPads and iPhones, its supply constraints could lead to delays in its releasing these products as well.

Apple is in the race to fend off competition from Samsung (SSNLF), Microsoft (MSFT), Alphabet (GOOGL), Nokia (NOK), Huawei, and Xiaomi in the Smartphone and tablet markets.

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