Apple Gets Burned on the Street, Shares Fall Into a Correction

Signs are growing that the iPhone is experiencing a sustained

Signs are growing that the iPhone is experiencing a sustained

Qorvo, which supplies radio frequency chips to Apple, said the forecast cut was due to "recent demand changes for flagship smartphones".

Estimates of Apple's "most affordable" 2018 model, the iPhone XR, has been cut by almost 30 million shipments, a famed Apple analyst has written in his research note.

"Apple's iPhone weakness has been a long-term issue for the Asia supply chain", said Arthur Liao, an analyst at Fubon Research in Taipei.

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

Lumentum makes the vertical cavity surface-emitting lasers, or VCSELs, that Apple uses for its latest iPhones that come with 3-D facial recognition.

Widely respected analyst Ming-Chi Kuo writes that sales of Apple's new iPhone XR are slightly below expectations, corroborating a handful of previous reports we've seen over the past few days. In its most-recent quarter, Apple reported nearly no increase in the number of iPhones sold, but revenue from that business jumped 29 per cent from a year earlier. This means that Apple reduced its component orders since then, and that the situation is worse than previously understood.

Apple is increasingly touting its base of 1.3 billion installed devices, rather than how many iPhones it sells each quarter.

"It is hard to give Hon Hai a positive rating", said Arthur Liao, an analyst at Fubon Securities, who characterised the result as neutral with most investors concerned about the outlook.

The Apple iPhone XR is supposed to be the somewhat-budget-friendly alternative to the company's ultra-luxury iPhone XS and iPhone XS Max models. And Citi downgraded Skyworks to neutral and slashed its price target to $85 from $116, citing both "disappointing iPhone XR unit sales" and "broad smartphone weakness". Apple said it preferred to focus on the company's transition to a services company, with regular recurring revenue.

The share price of Apple has plunged by 5% today as investors worry that the iPhone is not as popular as it used to be.

More recently, Apple launched a new version of its operating system, iOS 12, that supports an unprecedented 28 of the company's devices, including models that went on sale in 2013.

"Hon Hai's gross margin probably narrowed in 3Q as lower-margin, higher-priced products such as new iPhones constituted a greater share of its revenue mix", Simon Chan, an analyst at Bloomberg Intelligence, wrote in a Nov.5 note.

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