In what was a clear indication of weakness in projected iPhone sale, three of Apple Inc’s suppliers issued warnings on results which drove the shares of the US tech giant to a three month low.
Every new launch of the iPhone from the Cupertino, California, company is making the much loved device costlier and according to analysts, consumers - especially in emerging economies such as India, are ditching their loyalty with the company and opting for less pricey smartphones offered by a number of companies such as China’s Oneplus.
Blaming the fall on weakness in emerging markets and foreign exchange costs, earlier this month, Apple warned that holiday sales would miss Wall Street expectations.
About 5 per cent or about $50 billion was wiped off Apple’s market value on Wall Street after a $70 million cut off its forecasts for revenue on Monday was announced by Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones.
“Many suppliers have lowered numbers because of their unnamed ‘largest customer’, which is Apple. Apple got cautious in their guidance and it’s hitting their suppliers,” Elazar Capital analyst Chaim Siegel said.
A consumer that was “one of our largest...for laser diodes for 3D sensing” was the reason that Lumentum gave for its cut in numbers form what it had predicted originally just 12 days ago. Analysts believe that customer of the company can be none but Apple.
While cutting down its outlook, Screenmaker Japan Display Inc. blamed lower smartphone demand to be the reason. On the other hand, British chipmaker IQE Plc also said that it anticipates a material reduction in its financial performance in the current year.
There was a drop of 31 percent in the shares of Lumentum which also brought down the stocks of some of the other suppliers and chipmakers.
Pointing to poor orders for the new iPhone XR, the target price for Apple was cut by $4 to $270 by JP Morgan analysts.
Calculating on the basis of the average selling prices for 3D sensing parts and on the forecast by Lumentum, analysts have predicts that there would be a reduction of 18 million to 20 million iPhones compared to earlier estimates.
“Apple could have accumulated too much Lumentum inventory, and needs to work it off, in which case the unit shortfall is less, although it is still indicative of weak iPhone sales,” D.A. Davidson analyst Mark Kelleher said.
According to FactSet, analysts’ expectation of sale of 47.5 million iPhones for the fourth quarter was missed by Apple with a sale of 46.9 million iPhones.
According to a report published in Japan’s Nikkei earlier this month, a direction to halt plans for additional production lines which are exclusively used to make the iPhone XR was given by Apple for its smartphone assemblers Foxconn and Pegatron which were the cheapest of iPhones launched this year.
(Source:www.livemint.com)
Every new launch of the iPhone from the Cupertino, California, company is making the much loved device costlier and according to analysts, consumers - especially in emerging economies such as India, are ditching their loyalty with the company and opting for less pricey smartphones offered by a number of companies such as China’s Oneplus.
Blaming the fall on weakness in emerging markets and foreign exchange costs, earlier this month, Apple warned that holiday sales would miss Wall Street expectations.
About 5 per cent or about $50 billion was wiped off Apple’s market value on Wall Street after a $70 million cut off its forecasts for revenue on Monday was announced by Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones.
“Many suppliers have lowered numbers because of their unnamed ‘largest customer’, which is Apple. Apple got cautious in their guidance and it’s hitting their suppliers,” Elazar Capital analyst Chaim Siegel said.
A consumer that was “one of our largest...for laser diodes for 3D sensing” was the reason that Lumentum gave for its cut in numbers form what it had predicted originally just 12 days ago. Analysts believe that customer of the company can be none but Apple.
While cutting down its outlook, Screenmaker Japan Display Inc. blamed lower smartphone demand to be the reason. On the other hand, British chipmaker IQE Plc also said that it anticipates a material reduction in its financial performance in the current year.
There was a drop of 31 percent in the shares of Lumentum which also brought down the stocks of some of the other suppliers and chipmakers.
Pointing to poor orders for the new iPhone XR, the target price for Apple was cut by $4 to $270 by JP Morgan analysts.
Calculating on the basis of the average selling prices for 3D sensing parts and on the forecast by Lumentum, analysts have predicts that there would be a reduction of 18 million to 20 million iPhones compared to earlier estimates.
“Apple could have accumulated too much Lumentum inventory, and needs to work it off, in which case the unit shortfall is less, although it is still indicative of weak iPhone sales,” D.A. Davidson analyst Mark Kelleher said.
According to FactSet, analysts’ expectation of sale of 47.5 million iPhones for the fourth quarter was missed by Apple with a sale of 46.9 million iPhones.
According to a report published in Japan’s Nikkei earlier this month, a direction to halt plans for additional production lines which are exclusively used to make the iPhone XR was given by Apple for its smartphone assemblers Foxconn and Pegatron which were the cheapest of iPhones launched this year.
(Source:www.livemint.com)