Apple shares the sink after the decline of the iPhone vendor prospects

Japan Display
Inc.

which provides screens for the iPhone XR, reduces earnings forecasts for its fiscal year ending in March. She added that orders for her latest LCDs would be well below initial expectations for the three months ending in March.

Similarly,

Lumentum Holdings
Inc.

LITE -32.98%

which incorporates facial recognition components for iPhones, lowered its earnings forecast by nearly 25% for the three months ended in December, indicating that one of its largest customers had significantly reduced its deliveries for orders placed.

While none of the two suppliers had named Apple, Wall Street has responded by lowering the iPhone maker's stock by more than 5%, as a technological defeat has led to heavy losses in the stock market. The sale continues a decline that began after Apple released revenue estimates for the current quarter that disappointed investors and said it no longer reports unit sales for iPhone, iPad or Mac. Apple is down nearly 13% since the close of trading on November 1, just before the release of the results.

Apple did not comment, but referred to its earlier comments that its supply chain is complex and that attempting to extrapolate the performance of one of its products based on vendor forecasts can create a mismatch between planned sales and actual sales.

The iPhone maker is moving from a business focused on the number of devices delivered to one that relies on more expensive products and on increased software sales. and services to generate income.

Investors are adjusting to this transition, which is contributing to the decline in the stock, said Arif Karim, senior investment analyst at Ensemble Capital Management. California-based Burlingame, which manages $ 800 million, counts Apple among its 25 largest holdings.

"We are currently experiencing a series of doubts about the balance between unit growth – the number of iPhones sold – and the value provided to customers, ranging from price hikes to accessories such as AirPods to services" said Mr. Karim.

JPMorgan Chase

& Co. lowered its earnings guidance for Apple by 2 cents per share and predicts a 12-month drop in iPhone shipments and a decline in iPhone sales in emerging markets due to economic difficulties. However, JPMorgan said it still expects Apple's application store sales and streaming music business to generate strong growth.

Apple's stock market performance has long been tied to forecasts by the company's major suppliers. In 2013, a period during which the number of iPhones sold slowed, shares fell 5.5% after the iPhone provider

Cirrus Logic

warned against a significant write-down of stocks due to declining demand from an anonymous customer, suspected of being Apple. Similar share declines occurred in 2016 after the Wall Street Journal announced that Apple had reduced its orders from iPhone providers. Apple then announced its first drop in sales of iPhone units for its 2016 fiscal year.

Nevertheless, Ben Bajarin, a technology analyst at Creative Strategies, said it was difficult to look too closely at projected reductions from Apple suppliers such as Japan Display and Lumentum, as Apple can reduce or increase orders at any time. according to the demand of the iPhone. "The real question is: what will the calendar year look like? It's hard to predict that far, "he said.

Apple has released three new iPhone this year: the iPhone XS at $ 999, the iPhone XS Max at $ 1,099 and the iPhone XR at $ 749. Analysts expected the cheaper XR, released on Oct. 26, to account for about half of total new iPhone sales.

During a phone conversation with analysts on Nov. 1, on the operation of the device, CEO Tim Cook told Apple that he had "very, very little of data". However, he said the more expensive XS and XS Max models, launched a month earlier, had "a very good start."

– Takashi Mochizuki contributed to this article.

Write to Tripp Mickle at [email protected]