Top iPhone suppliers warn of slower sales ahead of Apple’s Q118 results

“Qualcomm Inc. and Broadcom Ltd., key suppliers to Apple Inc., have implied that orders related to the iPhone tailed off more than normal at this time of year,” Mark Gurman and Ian King report for Bloomberg. “Some of Apple’s iPhones are built with Qualcomm’s modems, which are chips for connecting to cellular networks. The San Diego-based chipmaker said Wednesday that orders from a large ‘thin modem’ customer tailed off at worse-than-typical levels in the quarter. It was widely interpreted that the customer is Apple.”

“Supply chain reports have indicated that the Cupertino, California-based technology giant has cut iPhone X orders in half for early 2018,” Gurman and King report. “Multiple analysts also have said the iPhone X was not the holiday smash hit that some expected.”

“Earlier on Wednesday, Broadcom said it expects a ‘greater-than-seasonal decline in wireless’ components, indicating fewer than anticipated sales of its chips for its fiscal second quarter, which ends in April,” Gurman and King report. “Qorvo Inc., predicted current quarter sales of as little as $645 million, missing analysts’ estimates by more than $100 million. Qorvo makes radio-frequency chips and gets about 40 percent of its sales from Apple, according to data compiled by Bloomberg.”

Read more in the full article here.

MacDailyNews Take: We’ll wait to see what guidance Apple provides along with what Cook and Maestri say later today, thanks.

Note: The record for iPhones sold in a single quarter stands at 78.29 million units, set during the holiday 2017 (fiscal Q117) quarter.

7 Comments

  1. Big Bets
    The bets don’t stop there, because there is almost $20 million being bet at the $175 calls, another $9.5 million at the $180 strike price, and nearly $10 million placed on the $200 calls. The puts do not see nearly the same amount of interest, as the table above shows.

    A 17 Percent Rise?
    In fact, with nearly $10 million being bet at the $200 strike price, Apple shares would need to rise to about $203 just for the calls to break even, a rise of about 17 percent from the stock’s current price.

    These are big bets being placed on Apple shares rising over the next couple of months, which means that the options market is either looking past all the hand-wringing analysts, or it is viewing any shortfall as short-term.

    Read more: Apple’s Stock Outlook Overwhelmingly Bullish,
    https://www.investopedia.com/news/apple-could-rise-nearly-17-june-option-trades-indicate/?partner=YahooSA&yptr=yahoo

    iPhone X drives Apple’s ‘best ever’ year for smartphone sales
    Apple has just begun its best ever year for iPhones, setting new records over the holiday quarter

    https://www.computerworld.com/article/3239529/apple-ios/iphone-x-drives-apples-best-ever-year-for-smartphone-sales.html

    1. Without the much higher ASP and GMs that the iPhone X brings to the table, AAPL has increased in value (on average of the last three years) from the day after earnings to the day of earnings (March quarter) by 12.88%.

      The range of results were:
      FQ2/2015 12.37%
      FQ2/2016 11.32%
      FQ2/2017 14.94%

      That average gain takes AAPL from $168.32 to $190 on day of April earnings report.

      Putting my money where my mouth is I hold 480 April Call Spreads requiring AAPL to Close at or above $190 to achieve max ROI.

      Because I don’t believe the negativity I also hold 375 April Call Spreads requiring AAPL to Close at or above $200 to achieve max ROI.

  2. **The San Diego-based chipmaker said Wednesday that orders from a large ‘thin modem’ customer tailed off at worse-than-typical levels in the quarter. It was widely interpreted that the customer is Apple.”**
    Why don’t these companies come out and just say it is Apple instead of just implying it? Why is it always being interpreted as Apple being the problem instead of some other company that is being supplied with those components?

    Still, the analysts are basically relying upon supply chain information which they’ve been told isn’t that accurate. I’d like to know if most tech companies’ sales are based upon supply chain numbers for those companies who use multiple or redundant component vendors. Is this only an Apple analysis problem? Darn, how I wish Apple would find some additional business where analysts can’t blindly attempt to determine the outcome before it happens.

  3. Broadcom wants to buy Qualcomm amd Apple wants to get rider of Qualcomm plus they have this legal battle. So these two wants to hurt the Apple when they see orders from Apple to dry up.

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