Apple share are tumbling (as are the entire complex of suppliers) following a report from Nikkei that Taiwan Seminconductor's shipments of iPhone 6s, iPhone 7 chips for June-Dec. period will likely shrink 70%-80% vs year earlier. As one anayst noted, a decline of more than 20-30% is not in consensus estimates. As Bloomberg reports, of particular interest is that this cut to orders is about upcoming iPhone 7, not about the well-publicized iPhone 6 slowdown.
The timing would be right about now for early wafer starts for silicon for September launch of iPhone 7... and it seems market participants agree...
"No brainer" investors in AAPL have now seen no price change since April 2012...
However, as Bloomberg reports, for investors contemplating prospects for the smartphone market after a shaky earnings report from Apple, Asian suppliers just provided a few hints: It’s going to get worse before it gets better.
Three suppliers that seldom command much attention, working behind the scenes to make devices sold under the brands of better-known customers, put out back-to-back earnings reports Tuesday. They spell trouble ahead for smartphone makers and other companies that once thrived on mobile mania.
Pegatron Corp., which assembles iPhones, missed profit expectations and said April sales dived 16 percent. Minebea Co., which makes LED lights for mobiles, lagged its own forecasts for revenue and earnings. Japan Display Inc., which supplies screens to Apple and others, said profit has deteriorated so rapidly it will lose money for the fiscal year and suspend a promised dividend. Adding to the gloom, Lenovo Group Ltd. tumbled to a four-year low as analysts warned of rising competition.
Asian components makers are positioned early in the supply chain so they often signal what’s ahead for giants like Apple, Samsung Electronics Co. and Xiaomi Corp. The iPhone maker offered evidence of a deteriorating market with its first quarterly sales decline in 13 years. Now, some are bracing for a possible triple-whammy: sliding sales, an unfettered market-share competition and crumbling prices.
"The smartphone industry will continue to slow down this year,” said Richard Ko, a Taipei-based analyst at KGI Securities Co. “Competition will worsen and prices will likely continue to fall."
And don't forget, Apple is the 2nd most crowded long among global stocks, according to UBS...