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

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Jan 17, 2019.

  1. MacRumors macrumors bot

    MacRumors

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    [​IMG]


    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.

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    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.
    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
     
  2. iRutherford macrumors member

    iRutherford

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    #2
    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.
     
  3. DakotaGuy macrumors 68040

    DakotaGuy

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    They will probably just raise prices again to keep profit high with less sales.
     
  4. brt356, Jan 17, 2019
    Last edited: Jan 18, 2019

    brt356 macrumors newbie

    brt356

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    Correction: I believe you meant to reference Apple's revenue forecasts in $Billions in your article.
     
  5. ZMacintosh macrumors 65816

    ZMacintosh

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    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.
     
  6. Mac Fly (film) macrumors 65816

    Mac Fly (film)

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    #6
    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?
     
  7. 2GoldFish macrumors regular

    2GoldFish

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    Wouldn't be surprised. But then hey, apparently Huawei poses national security risks to a lot of western countries.
     
  8. iPhysicist macrumors 65816

    iPhysicist

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    The forbidden fruit would be even sweeter. It's the high price tag. If one blames economy - then again its the price tag.
     
  9. CrysisDeu macrumors newbie

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    #9
    NO, Chinese smartphones are just more competitive with a lower price point.
     
  10. cardfan macrumors 68000

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    #10
    Perhaps. But why hope at all? I hope sales plummet. It’s good for consumers. Apple has to work harder.
     
  11. G5isAlive macrumors 6502a

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    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.
     
  12. Lazy macrumors 6502

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    #12
    "wiggy"?
     
  13. Freida macrumors 65816

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    #13
    Good news. Keep it coming. We really need Apple off the high horse. The went too far this time.
    So yeah, reality check slap is always good wake up call for great companies. Now make it better Apple. Its about time!
     
  14. amaguire, Jan 17, 2019
    Last edited: Jan 17, 2019

    amaguire macrumors newbie

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  15. magicschoolbus macrumors 65816

    magicschoolbus

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    Chinese spam accounts claiming Huawei is better then Apple incoming.....
     
  16. amaguire macrumors newbie

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    #16
    Prices are too high for me to continue upgrading every two years, as I have done in the past. Lack of preferred storage capacity in the XS is not helping. I still prefer a smaller phone, so will seriously consider the XS 64GB only if/when price drops to $800.
     
  17. keysofanxiety macrumors G3

    keysofanxiety

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    I think he means Trump. The joke was lazier than your MR name :D
     
  18. HJM.NL macrumors 68000

    HJM.NL

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    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.
     
  19. genovelle macrumors 6502a

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    #19
    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.
     
  20. ryanwarsaw macrumors 68020

    ryanwarsaw

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    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.
     
  21. Baymowe335 macrumors 68040

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    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.
     
  22. MoreRumors? macrumors 6502

    MoreRumors?

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    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!
     
  23. ryanwarsaw macrumors 68020

    ryanwarsaw

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    #23
    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.
     
  24. Baymowe335 macrumors 68040

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    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.
     
  25. CWallace macrumors 603

    CWallace

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    #25
    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.
     

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