Apple Stock Hits a Three Month Low Amid Warnings from iPhone Suppliers

Apple Stock Hits a Three Month Low Amid Warnings from iPhone Suppliers

Apple Stock Hits a Three Month Low Amid Warnings from iPhone Suppliers

A woman checks her phone at a flagship Apple store at Iconsiam shopping mall in Bankok, Thailand.

However, it's important to note that Kuo is not saying Apple will sell 30 million fewer iPhones during the holiday quarter.

Another iPhone component supplier has warned of softer than expected demand for Apple's latest handsets.

Hon Hai Precision Industry Co.'s disappointing earnings will fan fears that Apple Inc.'s legion of global hardware suppliers are in for hard times. ON Semiconductor Corp. fell 5.9 percent, Skyworks Solutions Inc. slid 5 percent, and Finisar Corp. dropped 4 percent. Both companies count Apple as a major customer. The Taiwan Weighted Index was down around 1.6 percent.

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 chose to stop reporting unit sales.

"For Apple, the iPhone shipment has reached its peak". One factor that hasn't been discussed widely is that Apple's advertising campaign for the iPhone XR practically seems non-existent.

According to a new report by Reuters, at least three iPhone suppliers have issued warnings on results to Apple that suggest weakening iPhone sales, causing the company's stock to hit a three month low today. Analysts said that this could only refer to Apple.

"With no new technology in sight next year for the supply chain, this is not ideal for the companies involved", said Nicole Tu, a Taipei-based analyst at Yuanta Investment Consulting.

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'Up through the first half of 2019 we likely won't see any breakthrough'.

In Asia, Japan Display Inc. slashed its forecasts for sales growth and operating margins, citing volatile customer demand.

As Bloomberg's Andrew Cinko noted Wednesday, Apple's correlation with the S&P 500 is double what it was a year ago and far larger than what it was in 2013-14 when Apple shares fell about 30%.

South Korean electronic parts suppliers Samsung Electro-Mechanics Co Ltd, Apple's supplier of multi-layer ceramic capacitors, dropped more than 5 percent, while LG Innotek Co Ltd plunged 9.5 percent.

"We believe these challenges are largely cyclical and investors should pay greater attention to the transformation to services, where Apple was able to report quarterly record revenue of $10 bn in [the most recent quarter] despite a regulatory challenge in China", the JPMorgan analysts write.

"This year Apple well and truly is the stock market once again", Cinko writes, "and its price action lately has been stirring up troubling signs about what might be next for equities".

"'(This) indicates that the company itself is not confident about its performance at the moment", said Park Jung-hoon, a fund manager at HDC Asset Management, which owns Samsung Electronics shares.

On a call with investors, CEO Tim Cook said the firm had "very, very little data" on iPhone XR sales, in contrast to the iPhone XS and XS Max which he said were 'off to a really great start'.

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