Worried About Demand, Apple Tells iPhone X Suppliers To Slow Down Component Delivery

Tyler Durden's picture

Following an embarrassingly dull rollout of the iPhone 8 last week, Apple's woes may be spreading to its flagship gizmo for the current product cycle, the iPhone X.

As Digitimes reports, Tim Cook's company has instructed component suppliers to "withhold part of the component shipments prepared for the production of iPhone X devices" according to unidentified Taiwan-based upstream suppliers.

The reason for the delay is that Apple is waiting to see the pre-sale orders of the iPhone X as well as the sales performance of the iPhone 8 and iPhone 8 Plus before pushing the production of iPhone X into full gear, said the sources.

The sources explain that iPhone X component suppliers are currently shipping parts and products that amount to only about 40% of the quantities originally planned for the initial production of iPhone X. However, despite the instruction for shipment slowdown, some suppliers still need to step up production to meet the 40% requirement due to low yield rates at their production lines, the sources indicated. Apple is said to have adopted the same strategy previously for iPhone 7 in 2016 - a phone which met with lackluster demand - during which initial shipments of parts and components reached only about 60% of the materials originally required by the vendor, with sources adding that Apple pulled in the remaining 40% of orders 1-2 months later.

Meanwhile, as Bloomberg reports this morning, in a double-whammy for Apple suppliers, their stocks have gotten hit in recent days on what is perceived as market disappointment with the company's latest product offering: on Monday Hon Hai fell 2.8 percent in Taipei, while Pegatron slumped 4.4 percent. TSMC dropped for a third day. AAC Technologies Holdings Inc., another supplier, retreated 6.7 percent in Hong Kong, and GoerTek Inc. capped its biggest loss since July 3 in China’s Shenzhen.

Hon Hai Precision Industry Co., which assembles the iPhone and other Apple devices, has fallen 10 percent in Taipei since Apple unveiled its collection of new gadgets for the holidays this month. Other suppliers across the region, including Taiwan’s Pegatron Corp. and South Korea’s LG Innotek Co. have plunged more than 12 percent. Taiwan’s $1.1 trillion equity market is particularly exposed to the swinging fortunes of Apple products, due to the dominance of parts manufacturers. Hon Hai and Taiwan Semiconductor Manufacturing Co., Apple’s main chip-maker, together make up a quarter of the Taiex total weighting, while exports account for more than half of the island’s gross domestic product.

"Orders of the new IPhone have disappointed the market and foreign investors may continue net selling Taiwan stocks," said Alan Tseng, Taipei-based vice president at Capital Investment Management. "The retreat of Apple suppliers has pulled down the benchmark index and could drag the index even lower in the coming month.

As a reminder, a channel check conducted last week by Rosenblatt Securities found that iPhone 8 pre-orders are "substantially lower" than iPhone 7 and iPhone 6 levels, with initial feedback suggesting that iPhone 8 volume is below predecessors in the U.S. and even more so in China.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Paul Kersey's picture

The more things change, the more they remain the same?  From the NYT:

 

"Yellen and Cohn Said to Be on Shortlist to Lead Federal Reserve"
HenryKissingerZuckerberg's picture

SNB stocks

as well?

the good thing is suicide nets will not be needed for a 40% production workload for the slaves apple has in china

Croesus's picture

"Hey, I'm running right out to buy the latest iShit!!" <-- Said I, freakin' NEVER. 

@ Little mincing queer Timmy Cook:

Funny how you whine about "how unfair society is", considering that you employ SLAVE LABOR to make your iCrap. You sir, can kiss my lilly-white ass. 

Mr 9x19's picture

apple is the only brand that justify the buying of the phone because once you shove it in your ass, even a broken one with no battery will keep kneading your prostate just by thinking of paid price.

 

 

new game's picture

Demand Wanning!!! LOL

Price, baby price.

fuking hilarious.

fuking 1000 dollas for what? again tell me the value here?

for a thousand dollas i can buy a pretty goddamn nice computer.

fuken eh, apple has left the spaceship called price discovery.

apple fuken loosers, fuken encripto mind control shitheads...

Diatom's picture

1000 dollars= Lenovo/HP/Asus/Acer PC + PS4/Xone + Nokia/Sony/LG/Samsung Smartphone

Oportunity cost is a bitch for Apple...

 

rpboxster's picture

Best observation I've seen:

Greatest gen: I paid $1300 for my first house

Boomer:  I paid $1300 for my first car

Gen X: I paid $1300 for my first phone

bloostar's picture

Price aside, what possessed them to release THREE new phones at the same time?! They also managed to skip the number 9 just so they could get the marketing boys to make a big sexy ‘X’ model on the front of a cardboard box. I’ve been a fan of Apple off and on over the years but no matter your allegiance, this is a step too far. Steve must be rolling in his grave.

earleflorida's picture

the apple don't fall far from the tree when one is never pruned?...--- in an orchard built on a hill!

nmewn's picture

They should offer them in an array of color schemes and charge people twice as much for that so they think they're getting a great deal!

Customers would break down the doors at Best Buy, why, it would look just like WalMart after Thanksgiving, trust me ;-)

yogibear's picture

And keep the policy of raising prices of each release.

Next offering  should start at $1,500.00

Their Apple zombies will keep paying,  as they are taking out loans to buy each one.

 

nmewn's picture

The real burning question of the day is, what does Kaepernick use...

...i-phone or Android? ;-)

pods's picture

Speaking of best buy, better half wanted a Bluetooth speaker. 

They had 1 @$40 bucks, then everything else was 150+. Fuck that. Target had a nice one for 75. Best buy is the new Circuit City, they just don't know it yet. 

pods

nmewn's picture

My secret wish is for the kiddies wake up and stop using their purchasing power to buy tracking devices used by paranoid schizophrenics in .gov and marketers in corporations. 

A simple two paragraph "terms of use" by network providers would be nice too.

It could be shortened over time to "You are not anonymous using this device on our network!"...but...baby steps first ;-) 

Stan Smith's picture

+1 and many more.

Best Buy is never the best buy.

_ConanTheLibertarian_'s picture

Once people understand that they don't need a new iPhone(y) every (few) year(s), (the) Apple will rot quickly.

pods's picture

People are realizing that 800 every two years on a phone is better spent elsewhere. 

Shit, I still roll along with my 4+ year old BlackBerry Z10. Still does what I need, why change?

pods

Stan522's picture

Demand (lack of) is the only recourse consumers have..... DON'T BUY IT FOLKS!

iveshrugged's picture

3D scan of my face, kept on file who knows where?  No thanks, I'll pass.  Just more biometrics that big-tech can gather on us.  Freaking creepy . . .

who cares's picture

Don't worry Tim Croock will find a justification

FSFT's picture

The face recognitoin is a show stopper. Fuck that

E.F. Mutton's picture

Version 9.0 likely has DNA recognition.  Or only works with an implanted iChip.

For convenience and safety!!

south40_dreams's picture

Timmy Cook says the asshole recognition software is going like stink

south40_dreams's picture

Timmy Cook says the asshole recognition software is going like stink

cherry picker's picture

Unfortunately apples tend to go bad after they have been off the vine long enough

I never did see an apple that had face recgnition, but it tasted pretty good

I usually throw apples out through the Microsoft windows I got.....

Didn't like those windows either

 

 

idontcare's picture

Er um, nothing to see here but the law of "supply and demand".  Most people have figured out that the premium price tag for Apple phones is unwarranted so they are no longer buying them.

messystateofaffairs's picture

An iPhone is an overpriced commodity supported by groupies. It will eventually have to fall in line with all commodity prices in its group. Same for Samsung.

Vinividivinci's picture

...moar stock buy backs...

TheSilentMajority's picture

The annual Apple con is exposed.

The sheep have finally learned that there is no significant reason to pay $1000+ to upgrade to either ip8 or X. The new phones are only slightly-upgraded versions of the ip6 from 2014!

The expensive fugly iwatch battery and connectivity stinks.

The expensive apple tv cannot even play youtube 4k.

The annual con is no more.

silverer's picture

"there is no significant reason to pay $1000+ to upgrade to either ip8 or X"

In fact, there is no significant reason to pay more than $100. for any phone. For the love of electronics, it's just a damned mostly annoying phone.

cherry picker's picture

Anyway I sent my I Phone with the face recognition back to the dealer as it wouldn't recognize my face, but would recgnize my wife's face when she wore make up.  But when she tried using it in the morning before she put on her makeup, the I Phone puked and wouldn't let her in.

Vinividivinci's picture

umm, honey, is that you? well, my iphone let me in,
and here i am reading this post...
"the iphone puked", huh?! very funny, no, really.

BlueHorseShoeLovesDT's picture

Some Chinese guy said...

New hedge fund strategy, buy a Chink to spread rumors.

Stan Smith's picture

iPhone = half the technology for twice the price.

bankbob's picture

How do you Milk Sheep?

Release a new IPhone and charge $1000 a unit.

silverer's picture

Let's see, new phone or a nice used motorcycle.

shizzledizzle's picture

Habitual channel stuffer asks suppliers not to channel stuff. 

silverer's picture

I have a better idea. The iPhone is a product that has reached maturity. Now you can now add crutches and medical care to it. You've had a good run, Cupertino. Dissolve the company except for the spare parts department and go pick REAL apples. People have to eat.

Dg4884's picture

Don't do snapple or apple.  It is all pfffft to me.

spanish inquisition's picture

Doesn't look good if everyone who wants one, gets one right away. Look for understaffing to make long wait lines so the newsboys come out.

Debugas's picture

too much greed

FSFT's picture

Wonder what idiot at Apple thought consumers wanted facce recognitoin? EPIC FAIL

yellensNIRPles's picture

I'm genuinely curious about this. I find it horrendous, but how many people either don't think twice about it, or worse love the idea?

That should give us a sample at least of whether or not we have a chance at stopping this type of technology being used on us in consumer devices without any discussion of its implications whatsoever. I think we're fucked. I think the average person will bend over and let them chip their asshole if .GOV says it's for their safety or it's a cool new technology from Apple. 

We have crossed the Rubicon.

cherry picker's picture

I had to get a new phone number after IPhone took my face

Kept on getting all kinds of calls from these plastic surgeons and age cream sellers telling me they can get rid of my wrinkles.

Then I started getting bill collector calls because my face resembled that of some scam artist.

Got so bad I had to use a mask every time I used the phone, then the cops came for me because I covered my face illegally.

Now I am wondering what to do, maybe go to one of those countries Trump banned so I can get some peace :)

 

balz's picture

Some peace if you wear a burqa.

Kelley's picture

Was it Bank Rate that reported 3/4th of households have under $800 in savings, and that half of all households live paycheck to paycheck?

Who exactly is supposed to line up for these high ticket items? 

Millennials? They have student debt and are still nesting with mom and dad.

Baby Boomers? They are overweight and have arthritis. No standing in line for them.

That pretty much leaves GenXers. They are earning less than workers of their same age 30 years ago. Nor are they going take off work or lose sleep standing in line when they have a job to go to.

nicturations's picture

my 3yr old $45 flip phone still works great , never needs updating , gets 3 day battery life and does not distract me with farcebook , twits , and other dumb "smart " apps . I'm looking forward to the day I can dump my cellular tracking device for good . I got by without one from 2008-2013 until i needed one for work again - it was bliss