shares of Apple's main iPhone supplier fell on Monday as investors worried about weak demand for one of the most important products in the technology industry! Let's see what happened to Apple's suppliers when they were frustrated again?
On Monday, the US east time, apple opened lower and left lower, opening down more than 2.6%, falling below $193.80 in the early trading, a new intraday low since July 31 this year, and the intraday decline expanded to more than 5%, finally closing down 5.04%, at $194.17, also a new low since July 31. The stock price of Apple suppliers fell sharply. Lumentum fell 32.98%, universal display fell 13.07%, Lingyun semiconductor fell 13.86%, Synaptics fell 8.21%, qorvo fell 6.38%.
Apple's sharp decline dragged down the information technology sector, which led the decline in the S & P 500, down more than 3.5%, the S & P 500 closed down 1.97%, the Dow down 602.12 points, down 2.32%, and the NASDAQ down 206.03 points, down 2.78%.
Before Monday's trading, lumentum and Japan display, two apple suppliers, lowered their performance expectations. JPMorgan cut apple's target price, while Citigroup slashed the target price of an apple supplier because of its poor performance on the iPhone.
Lumentum, a technology provider, lowered its outlook for the fourth quarter of this year in the Gregorian calendar, with CEO Alan Lowe saying a major customer of the company called for a significant reduction in product shipments.
Although Lowe didn't know which customer it was, the market quickly turned its attention to apple. Because lumentum provides the front camera production component of face ID and augmented reality technology for the new iPhone. Lumentum listed apple as the largest customer in its report for fiscal year 2018 as of the second quarter of the Gregorian calendar, with apple related businesses accounting for 30% of the company's operating revenue. As a result, Lowe's statement was seen by the market as a hint that Apple was underperforming.
Coincidentally, on Monday, Beijing time, Japan display, the iPhone display supplier and Japanese enterprise, reported six consecutive quarters of losses and lowered its full year performance forecast, reducing the expected annual sales growth rate from 10% - 12% to 5% - 15%, and the expected annual operating profit rate from 2% - 3% to 1% - 2%.
Just before Monday's trading, JPMorgan analyst Samik Chatterjee cut apple's target price for the second time this month, from $270 to $266, keeping the super matching rating unchanged. On February 2, he cut his target price from $272 to $270, citing concerns that a stronger dollar would make iPhones more expensive in foreign currencies.
Chatterjee on Monday cut apple's earnings forecast, saying weak macroeconomic conditions in emerging markets such as China and a stronger dollar affected iPhone sales. He cut iPhone sales to 214 million units and 218 million units this year and next, down 2 million and 10 million units respectively, and cut apple's EPS by $0.1 in 2019 and 2020.
Earlier on Monday, Citi analyst atif Malik downgraded Apple semiconductor component provider skyworks solutions to negative from buy, slashing its target price by nearly 27% to $85. Citi said that the reduction of skyworks solutions was partly due to the weaker demand for smartphones in the Chinese market and the disappointing sales of pre purchased iPhone XRS since October, which may affect skyworks solutions' product sales growth next year.
In addition, Longbow research, an institutional research firm, also mentioned that the iPhone may not perform well in the Chinese market. In its view, iPhone faces potential risk of falling demand in China.
"The iPhone has started to show some risk signs. The year-on-year growth rate of iPhone orders has weakened, and Baidu's iPhone search trend has turned red," Shawn Harrison, an analyst at Longbow research, wrote in the report. Baidu's iPhone search volume 'plummeted in October, indicating the potential risk of China's demand shrinking. ".
IPhone sales hit the ceiling, and the third quarter results have revealed concerns:
According to Wall Street, Apple's stock fell below $200 for the first time in three months and its market value fell below $1 trillion on May 5. Before that, a transaction in Japan, on February 2, apple reported that EPS in the third quarter was better than expected, but the three major hardware sales led by iPhone were worse than expected. Under the weak situation of emerging markets, the guidance of revenue in the fourth quarter was cautious, which worried the market about the sales performance of iPhone in the strong quarter.
Falling sales figures at least show that the iPad and MAC customer base can't fully withstand rising prices. In fact, Apple's mobile phone sales have hit the ceiling in the past few quarters, and the 0.5% growth in the third quarter is negligible.
At the same time, what's more interesting is that in order to prove that the year-on-year growth rate of service revenue did not fall by 20%, apple deleted the one-off benefit of $640 million from similar revenue in the same period last year. By 'forcing' revenue to $7.9 billion (formerly $8.5 billion) in the same period last year, service revenue in the past September quarter has risen 27% year-on-year.
The Wall Street Journal quoted David Yoffie, a professor at Harvard Business School who studies apple, as saying cook's team may take at least a year to prove that service revenue and more expensive devices offset the impact of flat or declining device sales.
On the second day of this month, Rosenblatt securities, BofA Merrill Lynch and RBC capital market adjusted Apple's rating or target price. Rosenblatt securities and Bank of America Merrill Lynch both downgraded apple to neutral. Bank of America Merrill Lynch lowered its target price from $235 to $220, RBC from $250 to $240, and the rating is still outperforming the market.
Tmall's double 11 brought good news, but Apple lost first place:
Apple is not without good news recently. The turnover of tmall global Carnival just ended this year reached a record high of 213.5 billion yuan. Among the 24-hour top brands announced by tmall, apple ranked first, Huawei and Xiaomi ranked second and third respectively, ranking among the brands with single day sales exceeding 100 million yuan.
Neil Shah, head of research at counter point research, said it was a positive sign for apple because Xiaomi and Huawei had been at the top of the list in the past. This shows that smart phone users in China are maturing rapidly, seeking to buy higher-end phones, which is good news for apple and other brands.
But in terms of specific data, Huawei's mobile phone brand glory should be the biggest winner of this year's double 11.
Some media reports pointed out that in the past, Apple has always held the first position in China's e-commerce promotion of mobile phone sales due to the high price of iPhone. But last year, the sales volume of glory in JD and tmall reached 4.02 billion yuan, among which the sales volume and sales performance in JD surpassed that of apple. This year, according to the results announced by glory, glory's sales volume and sales amount exceeded Apple's in tmall and JD platforms.
The official microblog of glory Mobile announced that as of 24:00 on November 11, glory had won the top three sales of mobile phone brands on the double eleven platform, the official flagship store of mobile phone brands and the sales volume; it had contracted the sales volume of mobile phones on November 11 on the Jingdong platform, and the accumulated sales volume and sales volume of Android mobile phones from November 1 to November 11 were the top four. Moreover, no matter the brand sales volume on tmall platform, or the sales volume and sales volume on JD platform, the glory surpasses apple.
Li Rui, CEO of Nuowei consulting, told first finance that Apple's lack of innovation in the past two years has also given other mobile giants a certain opportunity. There is considerable room for the oligarchs, and apple is losing its edge in China. 'the competition among mobile phone giants is also intensifying. The first round of reshuffle of small and medium-sized brand manufacturers is over, and the reshuffle of head brand officially begins. '