Is Apple shaking off its iPhone slump?

From Barron’s “Apple’s iPhone Slump Is Ending. Just Look at Its Suppliers’ Stocks” ($):

After a brutal third quarter, Apple suppliers like Skyworks Solutions and Qorvo are up—a lot. The case is getting clearer that the worst of the iPhone sales decline is over.

Skyworks (ticker: SWKS) and Qorvo (QRVO) dropped 26% and 21%, respectively, in the fourth quarter of 2018 after both companies’ sales forecasts disappointed—and worried—Wall Street. Their weakness presaged the iPhone sales troubles that Apple CEO Tim Cook outlined in January.

 Wednesday was a different story. Skyworks stock was up 12% by midday. Qorvo shares jumped 5%.

My take: If you’re going to track the supply chain, you might as well take the good with the bad.

3 Comments

  1. Gregg Thurman said:

    I don’t think the rise in SWKS and QRVO means increasing handset sales as much as it confirms that the DEC/JAN selloff was overdone on a lot of equities.

    After 3+ years of TC harping on Services growth it looks like WS has finally caught on:that handset sales peaked a while back and Apple’s future growth will come from Wearables and Services. And all it took was a solid smack up along the head with a change in reporting to get WS’s attention.

    It appears to me that WS is finally beginning to value Apple’s Revenue, Net Income and Cash Flow vs its myopic vision on iPhone units.

    WS and mules have a lot in common.

    3
    February 6, 2019
  2. Romie Lucas said:

    I am not convinced that WS will not behave exactly as they have in past the next time suppliers report softness in their numbers. I think the fact that this time it meant what everyone on WS seems to want it to mean will be the exception that proves the endless ”Apple is doomed” narrative. Confirmation bias is a powerful thing to overcome.

    2
    February 6, 2019

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