Friday, 22 February, 2019

Apple shares tank on iPhone sales warnings

Signs are growing that the iPhone is experiencing a sustained Signs are growing that the iPhone is experiencing a sustained
Nellie Chapman | 13 November, 2018, 20:19

Apple began shipping the iPhone XR on October 26 after two weeks of pre-orders. Apple didn't respond to a request for comment.

Among other Apple suppliers, South Korea's LG Innotek Co., which gets about half its revenue from Apple, slid as much as 9.5 percent.

Shares in Asian suppliers and assemblers for Apple Inc fell on Tuesday due to profit warnings that point to weakness in iPhone sales. For tech suppliers facing the future, they have no other big client like Apple, ' said Arthur Liao, an analyst at Fubon Research in Taipei.

TF International Securities analyst Ming-Chi Kuo cut his forecast for iPhone XR shipments from 100 million to 70 million.

Among other Apple suppliers, Cirrus Logic Inc. dropped 10 per cent at 9:49 NY.

Apple said earlier this month it would stop giving the number of iPhones, iPads and Mac computers it sold in a quarter, a closely watched metric and a key indicator of the company's success.

'We have reduced our iPhone XR shipment estimation from 100mn units to 70mn during the new product lifecycle (4Q18 - 3Q19),' Kuo said in a note to investors.

The slide may also reflect concerns that Apple knows that iPhone unit sales are going to go negative in the short-term, which is why it made a decision to stop reporting unit sales.

'Although Apple has positioned itself as a super-expensive handset maker providing high-end products, its strategy has not been working in emerging markets including China and India as Chinese vendors have been making iPhone-like products'.

"Apple is no longer a traditional hardware business", said Gene Munster, a veteran Apple analyst at Loup Ventures.

Apple's iPhone XR, which boasts the iPhone X's edge-to-edge display, is based on older LCD pixels instead of the X's high-resolution OLED screen.

More recently, Apple launched a new version of its operating system, iOS 12, that supports an unprecedented 28 of the company's devices, including models that went on sale in 2013.

"Some people may fear that this now means that the iPhone units are going to start going negative year over year because it's easier to talk about great things and not show the details of things that aren't so great", Citi analyst Jim Suva said during the conference call. "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". With November already in full swing, it will be interesting to see if Apple embarks on a huge iPhone XR marketing push over the coming weeks.