Apple stock slides on claims of slashed iPhone component orders, weak iPhone 6s demand
Apple shares took a small hit on Tuesday after a report claimed the company decreased iPhone parts orders for the coming two quarters, a move that suggests weaker than expected iPhone 6s sales.
In an intra-day note to investors, Credit Suisse analyst Kulbinder Garcha said recent checks with Apple's Asia supply chain revealed weaker iPhone orders than previously forecast, reports Street Insider. Following the note's release, Apple stock prices declined to close at $117.34, down from a $118.73 open.
"In our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters," Garcha writes, adding that unexpectedly low iPhone 6s demand appears to be driving the cuts.
Credit Suisse issued a nearly identical report three weeks ago, saying Apple cut supply chain orders on weak iPhone 6s demand.
The investment bank's Asia team supposedly confirmed a further decrease in orders for November, informing new build estimates of 70 to 75 million units for the December quarter and 45 to 50 million units for the three months following. As such, Garcha maintains sales estimates of 78 million iPhones for December and 55 million for March, culminating in 222 million units for the 2016 calendar year. While the numbers are lower than Wall Street consensus, the analyst believes Apple will one day expand its iPhone base to 615 million devices.
Interestingly, Garcha included a rumored 4-inch "iPhone 6c" in the March quarter model, estimating that the small format device could account for up to 4 million unit sales.
"[W]e note that Apple's recent capex guidance and purchase obligations suggest our iOS units have 25% upside (providing further evidence that it will launch a 4-inch screen device)," Garcha writes.
Analyst Ming-Chi Kuo was first to speculate that Apple would launch a revamped 4-inch iPhone sometime in 2016 as an entry-level offering. The prediction gained traction as subsequent reports appeared to confirm Kuo's claims.
Despite lowered iPhone estimates, Credit Suisse gave Apple an Outperform rating with a price target of $140.00.
In an intra-day note to investors, Credit Suisse analyst Kulbinder Garcha said recent checks with Apple's Asia supply chain revealed weaker iPhone orders than previously forecast, reports Street Insider. Following the note's release, Apple stock prices declined to close at $117.34, down from a $118.73 open.
"In our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters," Garcha writes, adding that unexpectedly low iPhone 6s demand appears to be driving the cuts.
Credit Suisse issued a nearly identical report three weeks ago, saying Apple cut supply chain orders on weak iPhone 6s demand.
The investment bank's Asia team supposedly confirmed a further decrease in orders for November, informing new build estimates of 70 to 75 million units for the December quarter and 45 to 50 million units for the three months following. As such, Garcha maintains sales estimates of 78 million iPhones for December and 55 million for March, culminating in 222 million units for the 2016 calendar year. While the numbers are lower than Wall Street consensus, the analyst believes Apple will one day expand its iPhone base to 615 million devices.
Interestingly, Garcha included a rumored 4-inch "iPhone 6c" in the March quarter model, estimating that the small format device could account for up to 4 million unit sales.
"[W]e note that Apple's recent capex guidance and purchase obligations suggest our iOS units have 25% upside (providing further evidence that it will launch a 4-inch screen device)," Garcha writes.
Analyst Ming-Chi Kuo was first to speculate that Apple would launch a revamped 4-inch iPhone sometime in 2016 as an entry-level offering. The prediction gained traction as subsequent reports appeared to confirm Kuo's claims.
Despite lowered iPhone estimates, Credit Suisse gave Apple an Outperform rating with a price target of $140.00.
Comments
Here we go again.
Apple is a one trick pony doomed
Precipitously? Really?
What's new! This happens every year. Apple breaks sales records then months later, demand is supposedly weak. Rinse and repeat every year.
-0.81% is the new "slide"?
Yeah.
They do this every year and when Apple reports another record quarter the stock remains depressed. These supposed component checks have proven to be unreliable for several years straight. I think they assume if they keep saying it, eventually they will be right. Apple just added a butt load of new carriers globally and even said they anticipate a record iPhone holiday quarter last week. Why would they say that if there was weak demand making them cut production. Did they ramp up to provide a cushion in case of problems during production? Maybe. But like Cook has said before embarrassing these clowns with blowout numbers, it would be willing to look at one or two data points to try to figure out what they are doing.
And AI, please try to be a good journalist, else we will do what many of us have done to MarketWatch -abandon AI and send our clicks to some other site.
I assume there was sarcasm there - If not, please move along.
The mandate of AI is to *REPORT* Apple related news and rumors. They are under no obligation to sift through the rumours and report only the ones they believe to be credible.
AI did not write the underlying report - Credit Suisse did. Regardless of the veracity of the Credit Suisse report, it is news that it was written and published - and as an investor, I would like to be aware of all of the "news", "reports" and rumors that other investors are being shown - whether they are true or not. The data in the report may not be true - but the fact that a (reputable?) agency has made these claims and presented them to the general public is most definitely true.
This is not "AppleTruth.com" or "onlygoodnewsaboutapple.com". AI is doing exactly what they are supposed to be doing. There was enough information in the headline and first paragraph that you could have surmised what the article was about and skipped it if it doesn't interest you.
You are upset that AI is publishing this? Why? Because it is not true? Wrong. It is 100% true - not necessarily that Apple has cut production - but it's 100% true that Credit Suisse has released a report that makes these claims. *That* is what is being reported. Your frustration and irritation seems to be significantly misdirected.