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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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Only recently, Apple (NASDAQ:AAPL) 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) component suppliers’ stock was down, which included Qualcomm, Intel, Skyworks Solutions, and Qorvo.

Apple (NASDAQ:AAPL) 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) 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.

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.

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Apple (NASDAQ:AAPL) 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.

The author has no position in any of the stocks mentioned. NewAgeAds LLC has a disclosure and ethics policy.
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