Apple

Shares In Apple’s Asian Suppliers Fall Due To Low iPhone X Demand

Shares in several of Apple’s Asian suppliers fell for a second straight day after a report said that iPhone X demand could come in below expectations in the first quarter.

CNBC reported that, according to Taiwan’s Economic Daily, Apple will slash its sales forecast for the iPhone X in the quarter to 30 million units, down from an initial plan of 50 million units.

Some analysts have also flagged disappointing demand, with U.S.-based JL Warren Capital predicting shipments of just 25 million units, as consumers shy away from the “high price point and a lack of interesting innovations.”

The news caused Apple’s shares to fall nearly 3 percent on Tuesday, on track for its worst day since August 10. Shares of companies that supply parts to Apple, including Broadcom, Skyworks Solutions, Finisar and Lumentum Holdings, all fell.

“There is news in Apple today, so it is causing some kind of angst in certainly Apple, maybe some Apple suppliers and maybe some tech in general,” said Ken Polcari, managing director of the NYSE floor division at O’Neil Securities in New York. “The whole Apple thing is giving people an excuse to take some money out of tech because it has been such a great performer.”

But other analysts were more optimistic about the future of the iPhone X: “Our work continues to suggest the March and June quarters will have a significant amount of iPhone X make-up shipments,” Chicago-based Loop Capital said in a note last week, forecasting shipments of 40 million to 45 million units in the first quarter of 2018, up from an estimated 30 million to 35 million units in the current quarter.

Analysts at Jefferies forecast around 40 million iPhone X sales for the first quarter.

While an Apple spokesperson declined to comment, during a trip to China this month, Apple CEO Tim Cook said he “couldn’t be happier” with the demand for the iPhone X in the country.

Apple suppliers that were hit the hardest include Genius Electronic Optical Co. Ltd., which dropped 2.4 percent on Tuesday to take its losses this week to 11.4 percent. Pegatron also fell on both days, losing 3.2 percent this week.

But falls for Foxconn, formally known as Hon Hai Precision Industry and one of Apple’s main suppliers, were milder; it lost only 1.8 percent over those two days.

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