Apple Shares Tumble Along With iPhone Suppliers As Sales Dry Up

Apple Shares Tumble Along With iPhone Suppliers As Sales Dry Up

Apple shares were trading down 4.2 percent early Monday afternoon, at $195.90, wiping close to $40 billion off the company's market cap.

Apple said earlier this month that it will no longer provide iPhone sales figures to investors.

Citi also cut its target on Qorvo on Monday due to iPhone XR weakness.

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While it isn't unusual to hear that Apple is cutting orders for its latest handsets from time to time, investors believe a real crisis is at hand. Now that forecast is being echoed by TF Industries' Ming-Chi Kuo. Lumentum's chips are not used in phones older than last year's iPhone X.

Loop Capital Markets also said the customer is likely Apple.

According to Lumentum's press release issued this morning they stated: "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter", said Alan Lowe, President and CEO.

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Shares of many Asian suppliers and assemblers fell on Tuesday, leading some market watchers to call the peak for iPhones in several key markets.

"The legacy iPhone models forecast is likely to increase significantly thanks to more affordable prices; the total iPhone shipments in 1Q19 are likely to see a YoY decline", Kuo continued, citing Career and Nissha Printing as two suppliers that might be affected by Apple's cuts. Not necessarily. To this point, Kuo articulates that lower demand for the iPhone XR may be offset - in a financial sense - by sales of Apple's pricier iPhone XS models.

"While Apple may have already contemplated some weakness in its guidance, we feel the timing and magnitude of the LITE reduction suggests Apple is seeing incrementally worse demand data", Hall wrote on Monday. Bank of America analysts were more optimistic, writing that the announcement could indicate an inventory build and an earlier start to production, which "could magnify the perceived impact of these cuts". "The Apple investment paradigm is moving away from a focus on device sales toward a more predictable services-driven business".

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"For Apple, the iPhone shipment has reached its peak. It doesn't matter a lot how many units there are in there in terms of the overall value of what's in the cart".

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