Apple suppliers take revenue hit as iPhone shipments fall

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iPhone XS box gold
Van-Seyla Mork claimed Apple sent out empty boxes instead of products.
Photo: Ste Smith/Cult of Mac

Apple suppliers have taken a hit in revenue during early 2019 as a result of falling iPhone shipments. Analysts don’t expect a turnaround anytime soon with Apple’s smartphone still struggling to catch a break in China.

Apple warned of slowing iPhone sales in January and attributed the fall to weak demand in China. It has since cut prices of its latest smartphone lineup — twice — but this seems to have done little to encourage a significant sales boost.

Now analysts at JP Morgan are reporting smaller revenues for Apple suppliers for the first two months of 2019.

Slow iPhone sales see suppliers suffer

Aggregate revenues have declined 1 percent year-on-year for early 2019, following growth of just 7 percent in the fourth quarter of 2018, the analysts say. Revenue from January into February declined a whopping 34 percent.

In comparison, the same periods in 2018 and 2017 brought growth of 13 percent and 4 percent respectively. Revenue between January and February 2018 declined just 23 percent.

The more affordable iPhone XR remains Apple’s most popular handset for now. It accounted for more than one third of shipments in the final quarter of 2018. The iPhone XS Max and XS accounted for 21 percent and 14 percent respectively. The iPhone 8 Plus and iPhone SE accounted for 9 percent.

No significant change in sight

JP Morgan is maintaining its forecast of 185 million iPhone shipments for all of 2019. It says suppliers remain cautious over smartphone demand for this year, with a 10 percent decline expected for China year-on-year.

Apple is expected to make changes to its pricing for the 2019 iPhone lineup in an effort to turn things around. It’s not yet clear how significant those changes will be, or if they will affect certain models of the iPhone exclusively.

Via: AppleInsider