Moscow, November 13 — “Lead. Economy”
US stocks declined amid falling shares of Apple Inc after weak projections of the two suppliers of the company that hit the papers the technology sector, reports Reuters.
Apple shares have lost 5.04% of the after manufacturer of laser equipment company Lumentum Holdings halved the earnings forecast for the second quarter. The company said, without disclosing details that its largest customer significantly reduced orders. Manufacturer of screens for phones Japan Display has also reduced its forecast for the year amid weak demand from manufacturers of smartphones.
Lumentum shares fell 30.9 percent, and securities of other suppliers of components for the iPhone, including the chipmaker Cirrus Logic Inc, Qorvo Inc, and Skyworks Solutions Inc, fell to 3-10 percent. The index of information technology sector of the S&P 500 declined by 2.0 percent, while the Philadelphia semiconductor index fell 3.3 percent.
After optimistic forecasts of 100 million devices sold to one of the reputable analyst Ming-Chi Kuo has revised the expected pace of sales of the iPhone Xr, reducing the total sales of iPhones and 70 million
Kuo noted that smartphone sales don’t go as well as planned in the company. The increased demand is still being watched for iPhone and Xr models of yesteryear.
Among the factors that influenced the reduction of its forecast, according to the expert, the weakening of interest in the Chinese market, a less active demand in General, competition from Huawei (in particular, the model lineup of 20 series).
Huawei is not too major player in the U.S., but in China and Asia in General the company is among the largest mobile vendors.
Earlier media have already started to leak rumors that sales of the new iPhone XR has not met expectations, so the Corporation cancels the production of additional batches of the new smartphone: market of such amount is not needed.
“For Foxconn, they first developed some 60 Assembly lines for the model XR, but lately have only used about 45 lines as a major buyer said he now doesn’t need to produce so much” — according to Japanese publication Nikkei Asian Review, noting that as a result of the reduction of the number of lines of the Taiwanese enterprise engaged in the Assembly of a new iPhone, will produce about 100 thousand copies per day. So the output will correspond to the current demand, which is 20-25% below the optimistic forecast previously announced.
Another assembler of devices for Apple, the company Pegatron, which also operates in Taiwan, is faced with similar problems of suspending the implementation of plans to increase production in anticipation of new guidelines from the American Corporation. “The capacity for the production of XR are not currently used to the maximum,” — said in the enterprise.
Another company, Wistron, must fulfill urgent orders for Apple, but the collector will not collect smartphones for the holiday season: it’s bad enough that it will release the rest.
While Apple has shifted, increasing the production of older models — iPhone 8 and iPhone 8 Plus, which is 20% cheaper than new items. According to the publication, the producers of these models have already received the order, exceeding forecasts by 5 million units 25 million instead of 20 million, a Major supplier of iPhone 8 Plus is a Foxconn, and Pegatron is releasing a cheaper iPhone 8.
However, Apple will be able to keep smartphone sales for the fourth quarter of 2018 at 75 — 80 million devices. But in Q1 2019, according to Kuo, Apple will manage to sell no more than 47 — 52 million smartphones.
Alas, after the company’s decision not to publish the reports figures on the number of smartphones sold, find out the real demand will not be easy. Senior Vice President and chief financial officer Apple Luca Maestri said that Apple will no longer publish separate accurate data on the sales of the iPhone, iPad and Mac. That is, Apple will no longer share the exact sales figures, and the recently published report will be the last, where it was possible to know exactly how many devices the company has sold during the reporting period.
Luca Maestri explained the changes that these data about the quantitative sales “do not reflect the business success of Apple”. He also said that the numbers no longer relevant. Apple CEO Tim cook made a comparison with grocery shopping at the supermarket. He said that for the seller it doesn’t matter how much product is in the cart, he is interested in the value of this product. Then the Apple CEO also made reference at the competitors — manufacturers of smartphones on Android. These companies have not published reports on the number of units sold.
It is believed that the reason lies in the reluctance of Apple to disclose the decline in sales in quantitative expression. In the last few quarters sales volumes do not change, although the turnover is increasing due to the increase in average sales prices.
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