Published: Wed, November 14, 2018
Money | By Hannah Jacobs

Apple share price plummets amid fears that iPhone demand is dropping

Apple share price plummets amid fears that iPhone demand is dropping

Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones, cut US$70 million off its forecasts for revenue on Monday, knocking another 5 per cent, or around US$50 billion, off Apple's value in morning trade on Wall Street. Shares of Lumentum plummeted a record 33 per cent while Apple dropped 5 per cent. Oclaro Inc., which is being bought by Lumentum, lost 12 per cent, its biggest drop since April.

The company did not name the chipmaker, but is a major supplier to US -based Lumentum Holdings Inc (LITE.O) which slashed its forecasts on Monday and said that one of its largest customers would "materially reduce" shipments for the current quarter.

As a result, he lowered his Apple fiscal 2019 iPhone unit sales forecast to 203 million from 215 million.


"Apple could have accumulated too much Lumentum inventory, and needs to work it off, in which case the unit shortfall is less, although it is still indicative of weak iPhone sales". And Citi downgraded Skyworks to neutral and slashed its price target to US$85 from US$116, citing both "disappointing iPhone XR unit sales" and "broad smartphone weakness". 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.

The report builds speculation around the success of Apple's latest iPhones with Foxconn the Company that assembles the devices cut back production lines from six to two.

Kuo believes consumers could also be waiting for Apple to release a cheaper iPhone XR.


IQE's shares closed down almost 29 percent on Monday after its warning.

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.

Apple was punting on this product to drive new sales. JP Morgan is now expecting the iPhone XR to account for 39% of new iPhones sold in the second half of 2018, down from its previous forecast of 47%.


Apple's iPhone XR, which boasts the iPhone X's edge-to-edge display, albeit using older LCD pixels instead of the X's high-resolution OLED screen, was widely expected to fuel a massive wave of upgrades from users of the iPhone 6S or earlier models.

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