Apple Slides On Report Of iPhone Order Cuts, Drags Nasdaq Lower

Posted On June 8, 2018 1:19 pm

Remember when a few months ago Apple stock slumped amid reports of slumping iPhone 10 demand and a weak orderbook, but investors were quick to forget all about Apple’s growing troubles when Tim Cook’s record stock buyback announcement and Warren Buffet latest investment quickly sent the stock to all time highs even though the fundamentals didn’t justify it?

Well, it turns out that despite the generosity of Uncle Warren who is simply chasing after the biggest stock repurchase program he could find, nothing has changed or been fixed at Apple, and this morning Apple’s German ADRs and the stocks of Apple’s European supplier tumbled after Japan’s Nikkei reported that Apple has asked its supply chain to prepare around 20% fewer components for iPhones debuting in the latter half of 2018, “taking a cautious approach toward smartphone shipments compared with last year’s orders, industry sources say.”

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” one of the four sources, who is in the supply chain, told the Nikkei Asian Review. “For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.”

The U.S. company last year placed orders to prepare for production of up to 100 million units of the new iPhone 8, iPhone 8 Plus and iPhone X, but this year Apple currently expects total shipments of only 80 million units for new models, two people said.

Nikkei also adds that total iPhone shipments, including new and previous generations, declined 1% on the year in the October-December quarter to 77.31 million, Apple’s data showed. The slowdown went beyond Apple, as worldwide smartphone shipments contracted 0.3% to 1.46 billion units in 2017, the first-ever decline in the industry, according to research company IDC.

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