Thursday, 19 July, 2018

Apple reportedly cuts 2018 iPhone part orders 20% in ‘cautious approach’

Leonhard Foeger  Reuters Leonhard Foeger Reuters
Nellie Chapman | 09 June, 2018, 12:14

The Cupertino, California, company told parts suppliers to produce 20% fewer components for versions of its iPhone X and iPhone 8, Japanese financial outlet Nikkei reported, citing sources familiar with the matter. It says the iPhone, which has contributed to 86% of Apple's revenue growth over the past five years, will make up just 22% of the company's revenue growth over the next five.

Apple's share price took a 2 percent hit when the news broke, and its suppliers were knocked by up to 6 percent.

Factoring in a drop in orders of one fifth, it seems that Apple expects to sell 80 million new model iPhones this year, down from 100 million.

Apple is preparing to introduce three new iPhones in the fall, according to the report.

Broadcom late Thursday reported fiscal second-quarter sales and earnings that topped Wall Street estimates, but it came up short with its sales guidance for the current quarter.

Despite the media reports that demand for the $1,000 iPhone X has fallen, Apple's market cap has continued to rise and is approaching $1 trillion.

Apple did not immediately respond to a request for comment on Nikkei's report.

Apple usually launches its new iPhone lineup during the second half of the year.

"I am not overly concerned. about the lower supply speculations". US -based suppliers Advanced Micro Devices, Micron Technology Intel, Broadcom Inc and Qualcomm Inc were all down between 1 percent and 3 percent. "Apple is doing enough in general to keep the ball moving forward", Forte said. However, in an attempt to offset the impact of a weakening smartphone market, the company has been focusing on services as a path to growth.