“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?