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Apple Watch Series 3 Connection Issues and Low iPhone 8 Pre-Orders Affect Apple (NASDAQ: AAPL) Suppliers

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Sep 22, 2017
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Only recently, Apple (NASDAQ:AAPL 156.25 0.17%) released a statement explaining that the Apple Watch Series 3 with LTE modem is suffering from connectivity issues and the situation did not die down after an analyst claims that iPhone 8 pre-orders are less than anticipated. Following the statement concerning the wearable, Apple (NASDAQ:AAPL 156.25 0.17%) component suppliers’ stock was down, which included Qualcomm, Intel, Skyworks Solutions, and Qorvo.

Apple (NASDAQ:AAPL 156.25 0.17%) and Suppliers Feeling Heavy Blow After Watch Statement and iPhone 8 Pre-Order Count Low Possibly Due to iPhone X Anticipation

After the Apple Watch Series 3 started exhibiting issues where it joins unauthenticated Wi-Fi networks without connectivity, occasionally resulting in the wearable losing out on cellular connectivity, the company’s spokesperson came out with a response, but that left a damaging outcome for the tech giant’s suppliers.

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“We have discovered that when Apple Watch Series 3 joins unauthenticated Wi-Fi networks without connectivity, it may at times prevent the watch from using cellular. We are investigating a fix for a future software release.”

After the statement, Apple’s suppliers stock was down that afternoon, with details provided below.

  • Qualcomm (QCOM-0.8%)
  • Intel (INTC-0.6%)
  • Skyworks Solutions (SWKS-4.6%)
  • Qorvo (QRVO-5.2%)

Since these suppliers are responsible for shipping LTE and RF modules for both the iPhone 8 and Apple Watch Series 3, the series of bad news involving the smartphone and wearable lineup gravely affected them. According to analyst Rosenblatt, iPhone 8 pre-orders are lower than iPhone 7 and iPhone 6, possibly in anticipation of the bezel-less iPhone X that is expected to be launched later this year.

Apple (NASDAQ:AAPL 156.25 0.17%) has also increased the base price tag of the iPhone from $649 to $699, which may also be hampering consumers demand for a smartphone that looks virtually identical to the models released last year, leading them to save their funds and invest in the upcoming flagship.

There are also rumors that the iPhone X is going to be in limited quantities when officially launched but the device itself might be a strong catalyst for lowered iPhone 8 pre-orders, irrespective if all three smartphones share the same hardware.

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According to analyst Jun Zhang, he states that there were about 1.5 million iPhone 8 pre-orders on JD.com in the first three days, compared to the iPhone 7 with 3.5 million pre-orders in the first three days. He also believes that China Mobile’s iPhone 8 pre-order volume was around 1 million units, compared to 2.5 million units and 3.5 million units for the iPhone 7 and iPhone 6, respectively, for the first three days.

Apple (NASDAQ:AAPL 156.25 0.17%) has said it will address the LTE connectivity issues on the smartwatch which could encourage more sales of the wearable but iPhone 8 and iPhone 8 Plus pre-order numbers might continue to look weak even after the arrival of the iPhone X. Carriers in the U.S. have yet to release lucrative iPhone 8 and iPhone 8 Plus pre-order offers to encourage higher numbers, so that could also be a contributing factor to the low numbers.

Do you think these statistics can improve with the passage of time? Tell us your thoughts down in the comments.

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