It’s not just Apple which relies on, well, Apple to make money. There’s a whole ecosystem of other companies orbiting the giant Cupertino sun, too. And they’re all affected by whatever news raises or lowers Apple’s share price.
That’s what took place this week when Wall Street’s latest wobble about Apple sent out shockwaves through the supply chain. As a result, a whole lot of companies which do business with Apple suffered their own sympathy stock declines.
Being an Apple supplier can be a curse as much as a blessing for some Chinese companies.
While earning Apple’s business can give a big boost to a company’s stock, a new study found that Apple’s suppliers saw their share prices drop significantly lower than Apple’s stock did during the recent iPhone sales slump.
Reports about lower-than-expected demand from Apple’s suppliers was one of the reasons so many people were predicting doom for the iPhone X.
But now that Apple has announced its crazy strong earnings for the quarter, Apple’s suppliers are enjoying a welcome boost to their stock prices — with shares rising by more than 14 percent in one case.
iPhone component orders for Apple’s suppliers aren’t likely to pick up until the third quarter of this year, a new report suggests.
It’s just the latest bit of bad news in a series of recent reports suggesting that Apple is slashing orders for its present generation iPhones, and may be leaving manufacturers with excess inventory.
With iPhone demand slowing down, one of the ways in which Apple is hoping to increase earnings is by pushing its suppliers to work for less money — but it doesn’t seem to be going entirely to plan.
According to a new report, Apple is meeting resistance from manufacturers in its Taiwan-based supply chain as it requests that they lower quotes for iPhone 7 components by as much as 20 percent.
Weak demand for the iPhone is causing earnings to fall for a number of suppliers in Asia, and few of them are hopeful that the situation is going to change.
Foxconn, the biggest assembly partner for the iPhone, saw its profit fall 9.2 percent last quarter, while Pegatron’s nosedived a whopping 35.1 percent.
There may be disagreement over when exactly Apple Watch 2 will arrive, but Cupertino is confident enough about its plans to start divvying up component orders among companies in its supply chain.
In keeping with its recent strategy, Apple is looking to diversify its supply chain for the second-gen wearable by taking on additional manufacturers.
Apple is widely expected to break with tradition by introducing its much-rumored 4-inch iPhone 5se in March, but despite predictions that this could net Apple an extra 10 million+ unit sales per year, it may not be enough to reverse the larger trend of slowing iPhone sales.
More evidence is piling up suggesting that iPhone sales may be weakening, with multiple Apple suppliers reporting lower revenues as a direct result of “weak iPhone 6s and 6s Plus sales.”
Apple has told iPhone suppliers in China to cut iPhone 5c orders for the fourth quarter following lower than expected demand for the device, The Wall Street Journal reports. Foxconn has been asked to cut orders by one-third, while Pegatron will reduce its shipments by 20%, sources claim.
