Apple’s iPhone shipments might be worse than initially expected, Wall Street analysts have warned their clients.
Fears have mounted after Taiwan Semiconductor Manufacturing (TSMC), which manufactures chips for Apple, this week revealed a disappointing financial forecast.
Related: iPhone X review
The firm’s revenue guidance range for Q2 is $7.8 billion-$7.9 billion, far lower than the Wall Street estimate of $8.8 billion, CNBC reports. TSMC is blaming its forecast on “weak demand” in the smartphone market. Cue panic.
“Given TSM’s guidance, we could see some additional downside to iPhone units,” Bank of America Merrill Lynch analyst Wamsi Mohan subsequently told clients. “In our opinion, investors are already expecting a weaker CQ2, but the magnitude could be surprising to some.”
J. P. Morgan analyst Gokul Hariharan, meanwhile, told clients: “TSMC’s 2Q18 guidance missed consensus expectations … largely due to weakness in high end smartphones (Apple iPhones, in our view). We believe the guidance now bakes in very weak iPhone shipments in 1H as well as a more cautious view on new iPhone build in 2H18.”
Unsurprisingly, that led to a swift 2.8% drop in Apple share prices.
Related: iPhone SE 2 rumours
The company cut iPhone X production targets earlier this year, due to lower than expected sales of the handset during the Christmas period in its main US, China and European markets.
The X’s sky-high price may have been a big factor, and recent rumours suggest Apple is working on a far cheaper iPhone SE 2 to follow the original that came out two years ago.
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