Is the iPhone XR in trouble? One superstar analyst thinks so

Virginia Carson
November 15, 2018

He's got an unbelievable track record-and that's not even to mention that Apple has announced it will stop reporting unit sales of its iPhones next quarter, suggesting Apple is expecting a downturn as well.

Analysts told Reuters on Monday that the "unnamed customer" the suppliers are blaming for their forecast cut is Apple.

Faced with a maturing smartphone market, Apple's strategy has been to entice customers to pay more for phones with new features such as facial recognition and more vibrant screens.

Major suppliers to Apple Inc.'s iPhone fell Monday as investors fretted that one of the most important product lines in the technology sector was seeing weak demand. This means that Apple reduced its component orders since then, and that the situation is worse than previously understood.

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Investors interpreted the news as cut in orders from Apple, which would jibe with the new iPhone 7 and 8 demand forecasts because those models don't use Face ID. Apple also provided lukewarm guidance for the all-important holiday quarter. For tech suppliers facing the future, they have no other big client like Apple, ' said Arthur Liao, an analyst at Fubon Research in Taipei. Apple didn't respond to a request for comment. Apple said it preferred to focus on the company's transition to a services company, with regular recurring revenue.

Apple accounted for half of Lumentum's revenue in its December quarter in 2017, while the iPhone is expected to represent 50 percent of Japan Display's revenue this year, according to the Wall Street Journal.

More recently, Apple launched a new version of its operating system, iOS 12, that supports an unprecedented 28 of the company's devices, including models that went on sale in 2013.

The Cupertino, California-based tech giant's shares fell to their lowest level in more than three months on Monday.

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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.

Apple stock is down over 10% since it said it would no longer disclose hardware unit sales on November 1 - and these reports suggest that it may be a while before the company has another unit growth spurt.

"This year Apple well and truly is the stock market once again", Cinko writes, "and its price action lately has been stirring up troubling signs about what might be next for equities".

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