Bad news continues to trade for Apple before the important annual season.
AMS, the manufacturer of lightweight smartphone sensors from Switzerland, this week became the fourth key supplier of the US company to reduce revenue estimates for the current quarter. The warning danger, with the huge earnings of the main iPhone asembler, Hon Hai Precision Industri, highlights concerns over poor demand for Apple's bread and butter.
Apple is at its longest loss within six months, as investors re-evaluate the company's growth prospects. Faced with the market for maturing smartphones, its strategy was to attract users to pay more for phones with new features such as face recognition, while the sale of video services to music is growing with a fast piston. But the company still rely on iPhone for most of its revenue, and the jury is still on whether its latest line is a bona fide hit.
Accumulation of warning signs led to a change in analysts in the past week. Guggenheim said on Wednesday that the company's recent reliance on rising average sales prices was "no longer enough" to boost growth at one point in the sale showing signs of slowing down. Shares in Japan Displai, one of the quartets that has reduced its sales prospects, dropped as much as 8.4% on Thursday.
"The iPhone is almost a 60% contribution to revenue and profits that look like a wind again," Guggenheim wrote on Wednesday in a research note.
Apple's decision to discontinue selling unit sales for its mainstream devices, including the iPhone, iPad and MacBook – as well as Hon Hai is also competing – has raised concerns about the look for manufacturers of components that depend on volume growth. AMS, the largest buyer of Apple, said on Wednesday that it cut its quarterly quarterly projections to $ 480 to $ 520 million from $ 570 million to $ 610 million last month.
Four main suppliers
The AMS has accused the reduction of "recent changes in demand from a large consumer buyer," a similar explanation to those offered by Korvo, Lumentum Holdings and Japan Displai this week, when they also unexpectedly reduced their chances. Kupertino, California, wants to diversify its suppliers, but four major component manufacturers that reduce revenue forecasts in the same week could mean that the company is working to reduce its newer device sales than expected.
None of the companies specifically cited Apple, but the iPhone manufacturer is the largest user and the largest revenue manager for all four companies, according to Bloomberg. Korvo gets 36% of Apple's revenue, Lumentum generates 30%, AMS receives more than 20%, and Japan Displai gets 55%.
AMS makes what is known as an ambient light sensor, which helps to measure distance from the phone from users, Face ID Face Recognition on Apple iPhone devices. Korvo makes wireless chips, while Lumentum makes 3D laser sensors for Face ID. The Japanese screen consists of smartphone screens.
Their warnings come when the smartphone market has once become firmly aligned, while economic uncertainty is expanding, and a permanent lack of new or innovative devices drives customers away. Apple has announced a disappointing sale of iPhone and projected quarter-quarter revenue below expectations. – Reported by Mark Gurman, with the help of Edwin Chan, (c) 2018 Bloomberg LP