Qorvo joins other Apple suppliers in cutting forecast

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Lumentum Holdings Inc. plummeted a record 33 percent after cutting its second-quarter outlook when one of its largest customers asked to "meaningfully reduce shipments" for previously placed orders.

Apple iPhone XR shipment forecast slashed by analyst Ming-Chi Kuo, due to weak demand. With a handful of key suppliers offering warning signs of lower order requests from a major supplier, many on the Street are becoming more cautious on Apple stock, doubting that higher average selling prices (ASP) can offset a slowdown in iPhone demand.

Longbow Research analysts said spot checks with Apple's Taiwanese suppliers late last week highlighted 20 per cent to 30 per cent iPhone order cuts related mainly to iPhone XR and XS Max, and 20 per cent to 25 per cent order increases for older iPhone models.

Apple is increasingly touting its base of 1.3 billion installed devices, rather than how many iPhones it sells each quarter.

Concerns over iPhone sales growth and a cut in forecasts from a number of Apple suppliers have investors anxious about the outlook for the world's largest company.

The report builds speculation around the success of Apple's latest iPhones with Foxconn the Company that assembles the devices cut back production lines from six to two.

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Now, that's being backed up by new reports by analysts from JPMorgan and TF International Securities.

Kuo has reduced "his overall iPhone shipment forecasts by 15-20 percent for the first quarter of 2019", notes the report. Starting at $750, the iPhone XR is a significantly cheaper alternative to Apple's flagship iPhone Xs and Xs Max but may still be out of many consumers' budgets.

He gave three reasons for his lowered forecast, citing negative impacts on consumer confidence from the Chinese-American trade war.

The iPhone XR also seems to be facing competition from Apple's own premium iPhone XS and iPhone XS models as users prefer the narrower bezels and better cameras on these phones. "Apple got cautious in their guidance and it's hitting their suppliers", he continued.

On Friday we reported that a company by the name of II-VI had acquired Apple backed Finisar. Apple said it preferred to focus on the company's transition to a services company, with regular recurring revenue. In its most-recent quarter, Apple reported nearly no increase in the number of iPhones sold, but revenue from that business jumped 29 per cent from a year earlier.

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