Apple Suppliers Cutting Sales Forecasts Amid 'Extraordinary' Decline in Chinese Demand

MacRumors

macrumors bot
Original poster
Apr 12, 2001
48,283
9,784



Major Apple suppliers in Asia have been cutting their 2019 sales forecasts and some have cited an "extraordinary" drop in Chinese demand, reports Nikkei.

Taiwan Semiconductor Manufacturing Co (TSMC), which supplies the A-series chips used in the iPhones and other devices, is forecasting a 22 percent drop in revenue for the January to March quarter. TSMC said there was a "sudden drop in demand" for high-end smartphones, also attributing its revenue decline to the U.S.-China trade war and economic uncertainty.


The same thing goes for Nidec, a company that supplies the vibration motor in the iPhone. Nidec has dropped its full-year profit outlook by upwards of 25 percent after slumps were seen in November and December.
"We have faced extraordinary changes," Nidec Chairman Shigenobu Nagamori told reporters at a Thursday news conference as the company reversed a previous forecast of a record profit. [...]

The tide shifted in November, however. "We saw big slumps in November and December," Nagamori said. "Orders, sales and shipments in all business segments around the world saw major shifts," he explained.
Apple has forecast its own decline in revenue, dropping guidance for the holiday quarter to $84 million, down from an earlier November estimate of $89 to $93 million.

Apple has asked its suppliers to cut iPhone XR, XS, and XS Max production by 10 percent for the next three months and has implemented its own reduction in hiring for certain divisions amid the slump.

The company is attempting to boost iPhone sales by dropping prices in China and offering increased trade-in values in the U.S. and other countries.

Article Link: Apple Suppliers Cutting Sales Forecasts Amid 'Extraordinary' Decline in Chinese Demand
 

ZMacintosh

macrumors 65816
Nov 13, 2008
1,229
329
other product lines get maybe 1-2 years between refresh cycles (others 2x-3x that) I dont see the issue with Apple doing 1.5-2 year between iPhone releases. they're kind of stagnant at this point and I have not upgraded to any of the new X versions, not bad phones just seem forced and way too expensive even on a upgrade plan.
 

iPhysicist

macrumors 65816
Nov 9, 2009
1,333
971
Dresden
I wonder if there's real "Apple boycott" happening in China, as previously reported. When traditionally nationalist countries like them claim something like it, they really stand behind it. I hope it isn't one of those things.
The forbidden fruit would be even sweeter. It's the high price tag. If one blames economy - then again its the price tag.
 

G5isAlive

macrumors 6502a
Aug 28, 2003
847
1,126
We could blame the trade war, and wiggy is an easy target, but these phone prices have gotten out of hand and competition is making better devices for most people. Maybe wall st and its companies need to stop being such greedy jerks?
Why does it have to be one or the other, why not a combination of both? If one is going to paint wall st and large companies as jerks, why not also include megalomaniac ego fueled politicians who don't care who gets hurt as long as they look tough? Apple is an easy target for agendas but I don't think its that simple.
 
  • Like
Reactions: jeremiah256

HJM.NL

macrumors 68020
Jul 25, 2016
2,081
3,702
Netherlands
To blame the economy is a cheap excuse for not looking at the real reason: Apple isn’t giving its customers value for money anymore. For the price of the iPhone X you can have two flagship phones from any other brand.

Apple needs to out innovate or half the prices to give customers a reason to buy or stay at Apples brand.

Loyalty has its limits so does greed.
 

genovelle

macrumors 65816
May 8, 2008
1,004
791
We could blame the trade war, and wiggy is an easy target, but these phone prices have gotten out of hand and competition is making better devices for most people. Maybe wall st and its companies need to stop being such greedy jerks?
Well that would have shown in September if it was pricing, not suddenly appear in December like this. What changed? Tariffs! And targeting China, where the demand dramatically dropped off. As much as apologist want to deny it, it is the direct cause. 65 percent of Apple sales come from outside the US like all of our largest companies. China is a very large and lucrative market and the many companies of all sizes here depend on the availability of things that make to survive. So, if companies like Apple are cut off from doing business with the rest of the world to suit people stuck in 20th century pre-internet economy thinking, they will go bankrupt. Apple, Google, Microsoft, and Amazon would basically cease to exist, because they are based on a world market place not just the US.
 

ryanwarsaw

macrumors 68030
Apr 7, 2007
2,641
2,300
other product lines get maybe 1-2 years between refresh cycles (others 2x-3x that) I dont see the issue with Apple doing 1.5-2 year between iPhone releases. they're kind of stagnant at this point and I have not upgraded to any of the new X versions, not bad phones just seem forced and way too expensive even on a upgrade plan.
I think that could be a possibility. Also they need to cut prices after some point into the cycle. So if they do a release every 18 months after say maybe 15 months lower prices to entice those that resisted upgrading. Also as people realize an upgrade is imminent and sales begin to slow down.

After that sell the leftovers only in emerging markets more deeply discounted. Don't offer last years products in stores in most of the world.
 
  • Like
Reactions: sunwukong

Baymowe335

macrumors 603
Oct 6, 2017
6,056
11,122
Apple told us this is almost entirely a China story and they weren’t lying. This doesn’t surprise me. Apple is doing well in many markets, including major developed markets like the US, Canada, and many places in Europe.

All you hoping for price declines likely won’t get them, but China might.

The competition in China is absolutely insane and competitors are making almost no margin.
 

ryanwarsaw

macrumors 68030
Apr 7, 2007
2,641
2,300
Why does it have to be one or the other, why not a combination of both? If one is going to paint wall st and large companies as jerks, why not also include megalomaniac ego fueled politicians who don't care who gets hurt as long as they look tough? Apple is an easy target for agendas but I don't think its that simple.
Cook himself denied there was any boycott. If that is true we can only assume the price is a much bigger problem than they are admitting to.
 

Baymowe335

macrumors 603
Oct 6, 2017
6,056
11,122
China gets a price drop and the U.S. gets a trade-in. Why not include us in a price drop?


LOL, MR did it again!
Because the US just hit record revenues and don't need a price drop. Again, the shortfall was over 100% China related. Apple didn't lie to investors.

You may not like the pricing, but many developed markets are paying the prices as usual. China did not. At least not up to the Apple standard.
 

CWallace

macrumors 604
Aug 17, 2007
7,175
3,131
Seattle, WA
Korean OEMs like Samsung and LG also reported significant drops in Chinese market sales of their premium phones in the days after Apple announced their slump. I believe a number of Chinese companies have also noted softness in their top-end model sales.

This could be an indication that the Chinese premium phone market is seeing significant contraction. After all, an inexpensive smartphone can run Wechat just as well as an expensive one does so unless a premium model brings in a new form factor to set it apart from it's earlier peers, the incentive to upgrade seems to not be there.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.