Apple supply chain wary of reduced iPhone orders for Q4

Posted:
in iPhone edited October 2018
Parts of the supply chain are tempering their expectations on iPhone sales for the remainder of 2018, a report claims, with weak sales said to be feared by suppliers based in Taiwan, despite the impending launch of the iPhone XR.




After the release of the iPhone XS and iPhone XS Max, and ahead of the upcoming opening of preorders for the iPhone XR, Apple's suppliers can usually expect a high number of orders in anticipation of the holiday shopping season. This apparently hasn't stopped suppliers from exercising caution over the imminent introduction of a lower-cost model.

Industry sources of DigiTimes suggest that if sales of the iPhone XR fail to stimulate overall demand for iPhones, Apple could slow down its pace of orders from suppliers, in turn damaging revenue.

Suppliers are already expecting to post weak sales in the fourth quarter of 2018 the report claims, with TSMC thought to generate "lower-than-expected revenues" in the fourth quarter, potentially forcing the chip foundry to revise its sales guidance for all of 2018 to a lower level.

In the case of Apple camera lens supplier Largan Precision, the company recently disclosed its shipments are expected to decrease in October, followed by another drop in November, similar to what happened at the end of 2017. The projected level of orders in December is "still unclear" for the lens firm.

It is also believed the ongoing trade war between the United States and China will impact overall smartphone demand, with shipments in the fourth quarter of 2018 already said to be decelerating.

At present, it isn't clear why the alarm from the component manufacturers is happening. At first glance, the order drops do not appear to be any more pronounced than in previous years, with normal seasonal decreases in orders.

The supply chain report seems to go against statements made by analyst Ming-Chi Kuo predicting higher-than-anticipated demand for the iPhone XR, with Apple expected to have about 38 million units ready in time for holiday sales. The strong demand leads Kuo to believe the model will defeat a "low seasonality" after the holiday quarter, with a 30 percent drop in sales in the new year rather than a near 50-percent drop saw by the iPhone 8.

Kuo also changed his estimated overall iPhone shipments for the quarter from 80 million to 83 million. Before the iPhone XS and iPhone XR release, DigiTimes Research anticipated shipments for the quarter of over 85 million units.

Comments

  • Reply 1 of 16
    JanNLJanNL Posts: 259member
    Please, not again...
    shrave10bb-15watto_cobranetmage
  • Reply 2 of 16
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   
    deminsdwilliamlondon
  • Reply 3 of 16
    gatorguygatorguy Posts: 20,617member
    Of course they're wary. They wouldn't be good business people if they weren't. 

    Heck, I come to work wary every day. 
    edited October 2018
  • Reply 4 of 16
    Rayz2016Rayz2016 Posts: 4,603member
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   
    Oh, I see. So you'd update your Mac Pro once every 12 months then?

    Or is it that you think that everybody on the planet bought their first iPhone in exactly the same year?




    edited October 2018 williamlondonmike1mwhiteking editor the gratewatto_cobranetmage
  • Reply 5 of 16
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   
    As most of us aren’t going to buy a new Mac Pro or Mac Mini every 2-3 years either. I am not even sure what you are saying aside from you want new macs. Your comment really has nothing to do with the actual article.

     So let me get this straight ... on the between years that you aren’t replacing your phone because of the price you will pick up a Mac Pro that starts at $2999.00 usd instead,  if there is innovation ?   Or is it that you believe a refresh of the Pro and Mini will create millions of supplemental sales in case iPhone starts to not do well in the next year or so?  

    Stick around for a while and you will see supply chain rumors are always wrong and have zero to do with how well the iPhone actually sells. You will also see that just because Ming-Chi Kuo tacks his 2c onto a rumor does not give it any more credibility. 
    williamlondonking editor the gratewatto_cobranetmage
  • Reply 6 of 16
    lkrupplkrupp Posts: 7,096member
    Parts of the supply chain are tempering their expectations on iPhone sales for the remainder of 2018, a report claims...
    A report claims. Okay, let's stop right there shall we.
    watto_cobranetmage
  • Reply 7 of 16
    asdasdasdasd Posts: 5,293member
    Start the death clock.
    bb-15watto_cobra
  • Reply 8 of 16
    brucemcbrucemc Posts: 1,527member
    Like clockwork...
    shrave10watto_cobra
  • Reply 9 of 16
    brucemcbrucemc Posts: 1,527member
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   
    I hope you don't take yourself seriously...

    So your logic is - you don't replace your phone every year - so Apple doesn't need to update their iPhone models every year.

    If you can't see the nonsense in this statement, there is no hope for you...
    watto_cobranetmage
  • Reply 10 of 16
    Wow,  people can’t have an opinion here that contradicts or questions things?  I guess I will now get bashed but I have to agree with some of what Jesusfreak said in their comments.   Would be great to get a new Mac mini or Mac Air,  instead of focus on new phones every year.  Having new phones come out every year seems a bit much.  I have a 1 year old iPhone 8 that was just called a “legacy” product recently in one of the articles on this website.  LOL,  obsolete after just 1 year, it’s insane. 
  • Reply 11 of 16
    Rayz2016Rayz2016 Posts: 4,603member
    brucemc said:
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   
    I hope you don't take yourself seriously...

    So your logic is - you don't replace your phone every year - so Apple doesn't need to update their iPhone models every year.

    If you can't see the nonsense in this statement, there is no hope for you...
     I've said it once and I'll say it again:

    If I was in charge then I'd make everyone take some sort of basic intelligence test before allowing them an internet connection.
    watto_cobranetmage
  • Reply 12 of 16
    What a waste of time reading this story. Why does Appleinsider recycle this kind of crap. Digitimes? Based on its sources? I don't need sources to predict that if a given
    Apple Iphone doesn't sell well that orders for its parts will soon be reduced.
    watto_cobranetmagewilliamlondon
  • Reply 13 of 16
    netroxnetrox Posts: 740member
    I am pretty sure that there is a significant reduced demand for iPhones. People are already happy with their iPhones. I have iPhone 6 and it's still as fast as usual so there's no compelling reason to upgrade except for convenience and better cameras. Not everyone is crazy about selfies or fantastic shots and not all care about FaceID or TouchID. 
  • Reply 14 of 16
    Gee, maybe instead of coming out with new phones every other day, they should try updating Mac Mini and Mac Pro and do some innovation in the computer space.   I know phones are important, but most of us aren't going to junk our $1000 iPhones every 12 months.   We are into the price territory where I need to get 2 or 3 years out of my investment.   


    What is this "junking" you speak of. I can sell my iPhone X today for $750ish then pay $250 out of pocket for the Xs or $350 for the Xs Max

    The last time I paid retail out of pocket for a phone was over 10 years ago.

    watto_cobranetmage
  • Reply 15 of 16
    Supply chain predictions are complicated by their very nature. There are many different scenarios that can lead to reduced forecasts. For example, a company can choose to "front load" their orders and buy enough supply for the entire year in the space of a couple months. Then once a buffer stock of parts has been received, can reduce forecasts drastically afterwards. That in no way is an indicator that sales are flat. In fact, it does not indicate anything at all. Analysts who try to read trends from the supply chain can easily make mistakes in judgement simply because they are only seeing a snapshot. That's like a blind man feeling an elephant's tusk and declaring to the world that elephants are long and hard.
  • Reply 16 of 16
    M68000 said:
    Wow,  people can’t have an opinion here that contradicts or questions things?  I guess I will now get bashed but I have to agree with some of what Jesusfreak said in their comments.   Would be great to get a new Mac mini or Mac Air,  instead of focus on new phones every year.  Having new phones come out every year seems a bit much.  I have a 1 year old iPhone 8 that was just called a “legacy” product recently in one of the articles on this website.  LOL,  obsolete after just 1 year, it’s insane. 
    Wtf are you on about??

    Lol, Apple is wildly famous for their 5 years of support for OS upgrades on their hardware (mobile... sometimes longer on computers).

    Yup... obsolete after 1 year would DEFINITELY be insane. Good thing you pulled that out of your ass, & it has zero to do w/ reality. =)
    watto_cobranetmage
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