Apple's Suppliers Projecting Weak Demand for iPhone 7 Due to 'Lack of Innovation'

[MacRumors]

Apple recently reported its first year-over-year decline in iPhone sales, with CEO Tim Cook claiming one of the reasons is that the upgrade cycle for the larger iPhone 6 and iPhone 6s series has stretched out longer than it anticipated.

Despite the launch of the lower-priced iPhone SE, that decline is expected to continue into the second half of this year. In reporting its first negative-growth quarter since 2003, Apple forecasted another revenue drop next quarter.

The sales decline is placing downward pressure on Apple's overseas suppliers, who have ridden the iPhone's coattails to success over the past half-dozen years. Not only does LCD supplier Japan Display reportedly expect to post a nearly $300 million loss for the fiscal year ended March, but Nikkei reports that Apple's slowdown is also sending Taiwanese suppliers into a downward spiral.

"Suppliers are saying that they are getting fewer orders for the second half of this year compared with the year-ago period," a source said. "The traditional peak season this year will not be able to compare to the past few years."

The report claims Taiwanese Semiconductor Manufacturing Company (TSMC), one of Apple's primary chip suppliers, may ship up to 30% fewer chips in the second half of 2016 compared to the year-ago period. The decline is attributed to the iPhone 7's expected lack of innovative features, saturation of the smartphone market, increased competition, and a global economic slowdown.

Another source said that for Taiwan Semiconductor Manufacturing Company, the sole supplier for the latest A10 chips used in iPhone 7, its iPhone 6s and iPhone 7 chip shipments for the June to December period will likely shrink to 70%--80% of the level reached in the second half of 2015.

Apple suppliers Largan Precision, LG Display, Catcher Technology, Foxconn, and Pegatron have and will likely continue to face similar declines in the near term.

Largan Precision, a key high-end camera module supplier for Apple's iPhone, reported its first year-on-year decline in revenue in three years in the last quarter of 2015. The company has suffered a revenue fall for five months in a row since last December.

Adam Lin, chief executive of Largan, attributed the dip to a "significant scale-back of orders from a major customer."

Apple is expected to announce the iPhone 7 and iPhone 7 Plus, the latter of which may be branded with a "Pro" name instead, in September. Newly leaked drawings suggest both smartphones may have no 3.5mm headphone jack and a single speaker, while a dual-lens camera system and Smart Connector will seemingly be exclusive to the larger 5.5-inch model with 3GB of RAM.

Article Link: Apple's Suppliers Projecting Weak Demand for iPhone 7 Due to 'Lack of Innovation'

 

[sputnikv]

this is pathetic

 

[chrismail627]

Finally someone acknowledges the lack of innovation! Hopefully Apple gets a wake up call.

 

[ghost187]

There isn't really a lack of innovation on the 7+, but there is a disparity of innovation between the 2 models.

 

[ericgtr12]

It's far more about marketing than innovation at this point.

 

[yaxomoxay]

I am no analyst, but this is not a difficult prediction

 

[mcfrazieriv]

They'll be scrambling to keep up. Maybe people are buying every other one now. I know I am.

 

[skinned66]

Way too early to call with any certainty IMO.

 

[trekkie604]

Bought every single iPhone up to the 6. Now I am 'droid.

 

[gugy]

well, I guess I am keeping my 5S for another year. No worries, still working like a charm but Apple is sleeping on the wheel. I think they are focusing on too many things at the same time. Prioritize Mac, iOS devices and services. Car and Watch not so much....

 

[Barry Bishop]

Its probably untrue and they are saying this to generate hype, and to create the illusion of scarcity.
It probably will be a great phone, dual camera, maybe 4k recording, possibly 4k screen, pretty amazing stuff. Like I said, this is probably an artificial marketing ploy

 

[bpeeps]

And the No **** award goes to...

You'd think they would, you know, DO something about the lack of innovation. Hell, I don't even need innovation, just give me change.

 

[twocents]

This reminds me of the speculation on who will be leading the polls going into the 2016 general election. Way to early to tell accurately as much can change between now and when we elect a new president, and more importantly I get a new iPhone! /s

 

[dk001]

Not exactly a surprise. Hope it's wrong, however ...

 

[btrach144]

The rumored 2018 iPhone should be coming out in 2017. Apple is losing control... or maybe Tim Cook is losing control of Apple.

 

[Mac Fly (film)]

I imagine a story with a title like this on MR should see a gathering of positive comments below it. Keep in mind we haven't seen iPhone 7 yet.

 

[dk001]

And the No **** award goes to...

You'd think they would, you know, DO something about the lack of innovation. Hell, I don't even need innovation, just give me change.

Give me a good working device with a basically bug-free OS. Not asking for too much here...

 

[Crosscreek]

I bought a SE with the latest guts and no protruding camera and the battery lasts forever at about half the price of the last full sized phone. I'm perfectly content for a few years.

 

[KdParker]

Just make sure there is enough to meet the demand.
Every year the iPhones go on backorder within minutes when pre-orders open, and I suspect it will be the same for the iPhone7/7Plus

 

[Sloppy.Joe]

Is the iPhone 7 out already? I must have missed it.

Obviously we know everything about the iP7 and have reached an accurate conclusion that it lacks innovation.

Good thing no one has jumped to conclusions.

 

[StrangeNoises]

While I agree with the sentiment here (still doubting I'll even upgrade my iPhone 5s to a 7 based on what we know) it's also fun and instructive to just cast your eyes down to the bottom of the page, and see the "Similar Threads" box, and the dates on those threads.

 

[rp2011]

I'm predicting the same thing. Just scrap it and wait to release something worthwhile.

Apple should just discount the 6 series, add the new chip and add more storage to spark sales and wait for whenever their re-do is ready to ship.

 

[bgraham]

Anyone remember the negative press for getting rid of the 30-pin connector? Getting rid of the headphone jack would cause far more negative press because it is the industry standard on absolutely everything. That alone could cause a significant fall in sales in my opinion.

 

[macduke]

Its probably untrue and they are saying this to generate hype, and to create the illusion of scarcity.
It probably will be a great phone, dual camera, maybe 4k recording, possibly 4k screen, pretty amazing stuff. Like I said, this is probably an artificial marketing ploy

It will definitely have 4K recording.

Source: my iPhone 6s

 

[pat500000]

A customer purchases iPhone 7 "hey guys I just picked up the iPhone 7. Wait a minute... That serial number looks very familiar......hey.....this was my old iPhone 6 Plus serial number!!"