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Apple Suppliers’ Sept. Revenues Show Weak iPhone 7 Demand

Wednesday, October 12, 2016 9:17
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(Before It's News)

iPhone 7If the revenues of its Taiwanese suppliers are any indicator, then the iPhone 7 may not be nearly the hit that Apple Inc. (NASDAQ:AAPL) investors are hoping for.

September sales for many of Apple’s iPhone suppliers, which make touchscreens, camera parts, and other components, fell significantly from last year. From Nikkei:

Seven out of nine Apple suppliers on NAR’s watch list reported a decline in sales from a year ago in a traditionally robust month, while more than half of their revenues slipped by double digits year-over-year.

Analyst Jeff Pu with Yuanta Investment Consulting is taking a dim view of the sales numbers:

“Apple’s iPhone sales could turn out to be slightly better than the extremely pessimistic view three months ago. The shipments for the flagship smartphone is still in a downtrend, and the orders for the supply chain are still quite conservative, compared with a year ago.”

Pu estimates that Apple will ship about 207 million iPhones this year, down 11.3% from last year’s 230 million. He added that while it’s too early to tell if the company will benefit from competitor Samsung’s Galaxy Note 7 debacle, the situation certainly deserves attention.

The sales drops were all over the map, depending on which supplier you’re looking at:

The monthly revenue of Largan Precision, a major iPhone camera lens provider, fell 10.19% from a year ago, while TPK Holding, which provides 3D touch modules for iPhone’s home button, posted a year-over-year drop of 32.45% in sales in September.

Catcher Technology, a key metal casing supplier for Apple, saw a 3.26% fall in revenue from a year ago.

Apple released its newest phone, the iPhone 7, last month to much fanfare. Although the device uses the exact same form factor as the previous generation, it features a waterproof case, updated internals, a better camera, new colors, and more storage.

The company is depending on its new iPhone to be a hit, considering its smartphone market share has plunged in recent years.

The initial run of the iPhone 7 quickly sold out, with shipping times now ranging from 3-8 weeks, depending on the model. Since its announcement, investors have seen conflicting reports from carriers, analysts, and suppliers. Depending on who you ask, the new phone is either a massive hit or a major disappointment.

Considering the fact that Apple refuses to disclose initial iPhone sales, investors will have to wait until its next earnings report to shed some light on the real story.


Apple shares rose $1.32 (+1.13%) to $117.62 in Wednesday morning trading. Year-to-date, AAPL has gained 11.44%, versus a much smaller 4.79% return in the benchmark S&P 500 during the same period.

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