“Taiwan Semiconductor Manufacturing Co., one of the biggest suppliers of chips to Apple Inc., forecast second-quarter revenue well below analysts’ estimates as demand for smartphones priced above $500 peters out,” David Ramli and Justina Lee report for Bloomberg. “”The world’s largest contract chipmaker, expected by analysts to supply processors for the iPhone 7, predicted China and other emerging markets will drive the popularity of cheaper devices, helping mitigate a global mobile industry downturn.”
“TSMC and other smartphone suppliers are grappling with the most pronounced slowdown in mobile demand on record,” Ramli and Lee report. “Apple expects its first revenue decline in more than a decade and worldwide smartphone sales in 2016 are expected to rise by a single-digit percentage for the first time, according to Gartner Inc.”
“On Thursday, TSMC cut its own 2016 smartphone demand growth forecast to 7 percent from 8 percent previously,” Ramli and Lee report. “‘The smartphone growth is this year mostly from the medium and the low end,’ TSMC co-Chief Executive Officer Mark Liu told investors on a conference call. ‘We see the over-$500 phone is reducing, but the $400 phone is increasing quickly.'”
“TSMC’s Liu didn’t specifically identify Apple as a client. The Cupertino, California-based company yields about 16 percent of TSMC’s revenue, HSBC’s head of technology research, Steven Pelayo, estimated in an April report. The world’s largest smartphone maker is again expected to trot out a next-generation iPhone in time for the holidays, which will drive TSMC’s business, he said,” Ramli and Lee report. “Other major customers include Qualcomm Inc. and Huawei Technologies Co., the world’s third largest mobile brand, according to data compiled by Bloomberg.”
Read more in the full article here.
MacDailyNews Take: Enjoying the “S” year tough compare, yet?
Apple should strive to execute annual iPhone updates, in three display sizes if the SE is successful (which we think it will be), and drop the off-year “S” model concept. Apple is certainly big enough and rich enough to do a new iPhone family each and every year. Apple should have killed the tock year “S” model idea years ago.
What’s happened with iPhone is painfully obvious: Apple was at least a year (more likely two years) late with properly-sized iPhones. When iPhone 6 and iPhone 6 Plus finally, blessedly materialized, buyers quite literally stampeded to get them. Then, when faced with such a “tough compare” this year, Apple was still sticking with their ill-conceived “S” model concept – making the tough compare much, much tougher.
The “iPhone 7” family – three models with the same case design and all with 3D Touch — comprised of the 4-inch iPhone 7 SE, the 4.7-inch iPhone 7, and the 5.5-inch iPhone 7 Plus — should have debuted last September. That would have taken care of the current tough compare with iPhone 6/Plus. Then, this year, the iPhone 8 family, again with a new case design, but now waterproof, with dual cameras, etc. would debut this September. In 2017, perhaps Liquidmetal and AMOLED will be ready go for the iPhone 9. Etcetera. No more “S” years, Apple. Duh.
Had Apple done as we’ve just described, they’d have sold millions more iPhone units this year and millions upon millions more each year going forward.
Apple’s raison d’être is to delight customers. “S” model “tock” year iPhones do not delight customers in the same way as new “tick” year models. Obviously. They’re still the best smartphones on the planet, but they’re just okay. A bit of a meh. We all know that “S” models exist so Apple can wring out nice margins from existing designs and tooling, not expressly to delight customers. When Apple strays from its main goal is when things get wobbly. Just delight customers, Apple, and the world will beat a path to your door.
If we didn’t work for MacDailyNews, we’d have skipped the iPhone 6s Plus and held onto our iPhone 6 Plus units with no qualms – and we’re the most rabid Day One iPhone buyers you’ll ever find.
Why have an annual iPhone upgrade program, if you’re not going to wow us annually with new iPhones?
The incompetent and lazy gay rights activist who’s been playing CEO, babysitting Apple and milking Jobs’ ideas dry, is finally on the precipice of driving Apple’s last cash cow into stagnation!
Don’t worry though, they still have Apple Music, the Apple Watch, and all of the wonderfully useful and affordable products that Tim Cook released… NOT!!!!!!
🤓
Do you really believe that?
It’s not just my opinion, it’s the truth.
Hurts, don’t it?
I remember my first beer…..
Did Tim Cook stand you up on a blind date? Your irrational hatred is borderline maniacal.
I’m not really sure how it’s Tim Cook’s fault that the premium smartphone sector is hitting a plateau?
The point is not to sell iPhones for over $500, or under $500. It’s to sell iPhones at a great profit margin. Apple has shown what can be done at $500 with the SE.
The iPod nano sells for $149 and is one chip set short of being a phone. Apple could easily do a $200 phone while retaining all present iPod nano functions. Not full up iOS 9 capability, but a phone with an Apple brand that could be sold way below the markets they currently serve.
Opportunity abounds.
A great profit margin is nice, for sure, but if a company can’t do that, it’s at least important for any company to keep their books well into the green. That’s usually what makes a company successful. Trying to compare Apple against companies like Huawei, ZTE, Samsung, etc. is a waste of time.
All Wall Street talks about is market share being the most important factor in selling products. They don’t consider balanced books all that important. It’s always, “Apple is losing market share to Android.” However, market share is costing Android profitability. Companies losing money to gain market share is a poor business model. In the long run, it’s not sustainable. In this world, there are more people who don’t have endless amounts of money to spend on some device and so Apple will never have major smartphone market share and it can’t be helped while maintaining their business model.
Apple is maximizing profits and that’s enough. It’s said Apple has a billion iOS devices in service and that’s no small amount. Wall Street is just greedy. If Apple had a billion and a half devices in service, someone would be complaining it’s not enough. Apple only needs to satisfy it’s customers and its own needs and tell the analysts to go screw themselves.
If Apple can use older chips and tooling, that’s a good thing for the ecology. If the products turn out well, then it’s good for Apple and consumers. Everyone benefits. I’m not sure why Wall Street is complaining, but that’s the nature of greed. Everything Apple does is frowned upon. In my opinion, it’s very difficult if not impossible to have the highest market share and the highest profits. Microsoft managed it for many years selling software, but it still wasn’t sustainable. Doing it with hardware has to be a lot harder.
Losing money to get market share is bad business? Tell that to Amazon for the past 10+ years.
Let’s see…supply chain rumors…earnings announcement coming up…check! Can you say “stock manipulation”?
The real question here is buy more stock before or after the announcement?
Both…