A pair of Apple suppliers issue new guidance warnings

From Nikkei Asian Review’s Apple cuts iPhone production plan by 10%:

Among leading Taiwanese iPhone suppliers, camera lens provider Largan Precision was the first to react to Apple’s revenue downgrade. In a regular monthly disclosure, Largan on Jan. 5 said its sales in December plunged 34% on the year and declined 20% from November. Its revenue of 3.22 billion New Taiwan dollars ($105 million) marked its worst December sales performance since 2013.

Metal case supplier Catcher Technology on Monday said it expects sales in the current January-March quarter to fall from a year earlier. Catcher saw revenue tumble 28% in December from the year prior. Of the new iPhone models, Catcher mostly makes metal frames and does glass back assembly for the XR. It supplies a small portion of the frames used in the XS Max.

“We expect the market conditions at the end of 2018 will continue into 2019,” Catcher said in a statement to investors, calling conditions “challenging” and describing the outlook for demand as “highly uncertain and volatile.”

My take: I’ve learned to take Nikkei Asian Review headlines with a grain of salt (see here, here and here). I’ve learned the hard way not to call FUD on guidance warnings issued by Apple suppliers.

4 Comments

  1. Gregg Thurman said:

    But articles from the likes of Nikkei are often as not wrong. Compant guidance remains the best intelligence.

    Nikkei et al look smart this time around because, like a broken clock, they were right.

    1
    January 9, 2019
  2. Fred Stein said:

    Supply chain rumors, whether true or false, only relate to near term. This is marginally useful for traders who can (or think they can) out-smart the market.

    Long term investors Apple investors take heart in Tim Cook’s points with Cramer: 1) The increase in installed base by 100M over last year means the ecosystem is intact. They aren’t losing customers. 2) 19% growth in lines of business outside of iPhone, means Apple’s innovations continue to drive growth. There’s nothing new or insightful about these points. But the market may take a long time to see this.

    0
    January 9, 2019

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