Apple supplier hints at falling iPhone sales

REUTERS
Published Nov 16, 2018, 5:05 am IST
Updated Nov 16, 2018, 5:05 am IST
Like Lumentum, AMS supplies Apple with software components needed for its FaceID technology.
Like Lumentum, AMS supplies Apple with software components needed for its FaceID technology.
 Like Lumentum, AMS supplies Apple with software components needed for its FaceID technology.

Vienna: Austria’s AMS, which makes facial recognition technology, became the latest Apple supplier to cut its revenue forecast, adding to growing evidence that the latest iPhones are not selling well.

The Swiss-listed group cut its fourth-quarter revenue outlook by 15 per cent and pushed back its medium-term targets, blaming “recent demand changes from a major customer”.

 

AMS, which specialises in sensors, did not name Apple as the customer, but analysts estimate that the US giant accounts for 40 percent of the Austrian group’s sales.

Apple shocked investors two weeks ago with a lower than expected sales forecast for the Christmas quarter, prompting suppliers including US firm Lumentum, British chipmaker IQE and screen maker Japan Display to issue warnings that pointed to weakness in new iPhone sales.

Like Lumentum, AMS supplies Apple with software components needed for its FaceID technology.

Anglo-German chip designer Dialog Semiconductor, which struck a $600 million deal with the US tech giant last month bucked the negative trend when it said late on Wednesday it does not see a drop in demand from Apple. Dialog justified this by pointing out that it supplies many more products than the latest iPhones.

For the past year, investors had largely been willing to overlook stagnating unit sales of the iPhone because average selling prices kept rising. But Apple now faces fierce competition from mid-priced phones from makers such as Xiaomi Corp.

The California-based firm started selling its latest phone generation, the iPhone XS and XS Max in September and the XR model last month.

The new AMS guidance suggested between 11 and 18 million fewer iPhones would be produced in the fourth quarter than an initially estimated 77-82 million, Credit Suisse analysts said in a note to customers.

“This is largely in-line to read from recent Lumentum warning,” they said.    

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