Japan's Nikkei daily reported earlier this month that Apple had told Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR, the cheapest of this year's new launches.
Apple cautioned earlier this month that it could miss Wall Street estimates for the holiday shopping season. Then Lumentum Holdings Inc., a top maker of iPhone facial-recognition sensors, lowered its second-quarter outlook.
Lumentum blamed the cut in numbers it gave initially been just 12 days ago on a client that was "one of our largest. for laser diodes for 3D sensing", which analysts said could only be Apple. "This raises an incremental risk for the rest of the supply chain".
These reports come shortly after Apple announced that it would no longer provide iPhone unit sales, one of the key signals that analysts use to evaluate Apple's business.
Overnight Apple iPhone suppliers like Cirrus Logic Inc. dropped 10 percent, Skyworks who also make the Harvey Norman Toshiba TV's dropped 3%, Broadcom 5.3% Finisar 4.7%.
"In addition to more durable iPhone offerings, we worry that the combination of a smartphone market that has gone ex-growth and increased iPhone ASPs, especially relative to the market, risks materially pushing out replacement rates for iPhone", he wrote on Monday, referring to average selling prices. "Apple got cautious in their guidance and it's hitting their suppliers", Elazar Capital analyst Chaim Siegel said. In its most-recent quarter, Apple reported nearly no increase in the number of iPhones sold, but revenue from that business jumped 29 percent from a year earlier. This means that Apple reduced its component orders since then, and that the situation is worse than previously understood. 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.
Apple began shipping the iPhone XR on October 26 after two weeks of pre-orders. The securities and banking house says that it too expects Apple to cut back on iPhone orders, but also mentions that the company is having issues expanding its profit margins.
Apple is increasingly touting its base of 1.3 billion installed devices, rather than how many iPhones it sells each quarter.