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Apple and suppliers’ stocks fall after report of a cut in iPhone component orders

Apple Store
Apple’s supply chain is huge, and it can be difficult to glean an overall picture of demand from speaking to individual firms.
(Mark Lennihan / Associated Press)
Bloomberg

Shares of Apple Inc. and several of its suppliers declined Friday after a report that the technology giant has warned its supply chain of a drop of about 20% in new iPhone component orders.

Apple stock was down 1.7% at 9:42 a.m. Eastern time. Shares of Austrian supplier AMS AG dropped as much as 7.2%, and in the United States, Cirrus Logic Inc. fell 3.5%, Skyworks Solutions Inc. fell 2.6% and Qorvo Inc. fell 1.2% after the Nikkei newspaper said Apple told its supply chain to prepare about 20% fewer components for iPhones debuting in the latter half of this year, compared with 2017’s orders. The newspaper cited people in the industry whom it didn’t identify.

Apple’s sprawling supply chain comprises hundreds of companies, and it can be difficult to glean an overall picture of demand from speaking to individual firms. Apple Chief Executive Tim Cook also has warned investors against picking up cues from disparate data points.

“We believe the bark is worse than the bite as we saw last quarter with erroneous reads out of the Asia supply chain,” GBH Insights analyst Daniel Ives said. “We believe the upgrade opportunity is massive for Apple over the next six to nine months, and we view this report as noise.”

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Cupertino, Calif.-based Apple plans to release three new phones this fall, including a model with some of the flagship iPhone X’s features but a lower price tag, and the largest iPhone ever.

Apple’s shares were up about 14% so far this year through the close of trading Thursday, while European suppliers have had mixed fortunes. Dialog Semiconductor Plc is down 42% in 2018 after Apple, its biggest customer, decided to scale back orders.

Mellor and Viita write for Bloomberg.


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