Another Apple iPhone Component Supplier Slashes Demand Forecast
Today a major iPhone component supplier, Cirrus Logic Inc, slashes its outlook for upcoming iPhone orders, joining a slew of other Apple suppliers that have reduced their forecasts for the upcoming months.
After the news broke, Cirrus stock went tumbling down amid a very poor overall day for the market as a whole. While Apple (NASDAQ:AAPL) sank somewhat in-line with the broader tech market sell-off at 1.6 percent down on the day, Cirrus (NASDAQ:CRUS) plummeted by over 6 percent today.
Back in February, Cirrus Logic CEO Jason Rhode said that while its "design position with key customers remains strong, revenue was below expectations due to unanticipated weakness in smartphone demand that materialized in late December."
Cirrus supplies audio chips and other components related to the audio functions of iPhones.
Overall all the pieces add up to Apple iPhone growth slowing way down. Gone are the days of yesteryear that saw Apple posting 30 percent gains year-over-year. HSBC Global Research said it concisely in a note to investors today:
For now, we expect second derivative of growth to slow dramatically in core iPhone business. Apple’s iconic hardware unit growth is broadly over for now…What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products is now facing the reality of market saturation.
Apple, with untold billions of cash on hand, is looking to rectify the situation with some unusual moves for the Cuppertino, CA-based company. New kinds of promotions such as..
When has Apple ever before advertised an iPhone at $300 less than it actually costs by using an asterisk? pic.twitter.com/DTNLrOCxly
— Mark Gurman (@markgurman) December 3, 2018
Cirrus was trading at north of $70 a share back in July of 2017. Back then investors were expecting an accelerated demand curve for iPhones as the upcoming iPhone X was thought to decrease average users' upgrade time. What we saw in fact was almost the opposite. iPhone shipments actually leveled off in 2017 and demand was flat through the first parts of 2018. Cirrus closed today at $37.95, nearly half its value from a year-and-a-half ago.