Apple's suppliers expect business to be tough in the second half of 2016

posted by Alan F. / May 12, 2016, 1:11 PM

Apple's suppliers expect business to be tough in the second half of 2016

Industry analysts are putting their psychic hats on and see bad times ahead for those tech suppliers in Taiwan who supply bigger companies, like Apple, with parts. A source told the Nikkei Asian Review that these vendors are seeing slower orders for the second half of the year. For example, TSMC, the company that will produce 100% of the A10 chips for the Apple iPhone 7 and Apple iPhone 7 Plus, sees chip shipments in the second half of this year declining to reach only 70% to 80% of last year's deliveries.

Apple is TSMC's largest customer, accounting for 16% of the firm's $25.93 billion USD in revenue that it rung up last year. That resulted in profits of $9.83 billion USD for the chip manufacturer. But one person who is said to be familiar with TSMC's operations says that revenue growth will be up just 4% this year, and operating profits will be flat all because of the slow down in orders from Apple. TSMC itself has predicted 5% to 10% year-over-year growth in revenue and operating profits for 2016, although most analysts say that growth at that level can not be attained by TSMC this year.

A drop in demand for Apple's next iteration of the iPhone is expected as Apple is rumored to be putting off a major redesign of the handset until 2017. Ming-Chi Kuo, the highly accurate Apple analyst who toils for KGI Securities, says that the next iPhone model will not have many "attractive selling points."

Apple's shares hit a new 52 week low today at $89.47, and are currently trading at $90.07. The most valuable company in the world has seen its valuation drop under $500 billion to $493.7 billion. Right behind Apple is Google parent Alphabet, valued at $488.9 billion.

source: NikkeiAsianReview via SeekingAlpha

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40 Comments

1. Unordinary unregistered

Blablabla same story every year. Then what'ya know - record numbers.

posted on May 12, 2016, 1:36 PM 2

5. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Until last quarter. Also they only had record sales for a quarter, not the whole year. Oh and maybe record pre-orders which even with $200B takes 8 weeks to get. Apple artificially created demand, by short-shipping products. Because if it takes you 2 quarters to actually get the phone, you may as well wait one quarter for the new one. Thus forcing demand for the same model everyone bought last year, but with one new feature so you can feel better about being gypped vs the guy who was gypped last year. lol

posted on May 12, 2016, 2:11 PM 7

7. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Also in case you are blind, which you are. When Apple release the 6S, 3 months after its release, it wa announced Apple was cutting orders for components. This is excatly what happened with the release of the iPhone 5C, which I only saw one person with since its release, so I wonder what happened to all the others they made? http://www.idownloadblog.com/2013/10/16/cut-5c-production-increase-5s/ http://www.cnbc.com/2015/11/10/credit-suisse-apple-cutting-iphone-production-orders-by-10.html At this point this news was done in November 2015. So Apple already knew they were lookign to have a huge quarter. So yes they had record sales for a single quarter, and their typical pre-order demand, though they never fill them on purpose, which drives people to buy the older model because the new one isnt available. Which is why the iPhone had 70M+ sales for its first quarter of fiscal first quarter at the end of 2015. Because the ^S wasn't avail in enough qualities as per usual and instead of waiting, many just bought the iPhone 6 which was reduced in cost. After all, both phones are identical and force touch isn't even worth an upgrade as Apple has already all but dropped it. Seeing as they released 2 iPad's without it. Apple is now throwing crap at the wall and seeing what is sticking. Force Touch is all by dead in Apple's camp. In fact how many apps are using it outside of Facebook and Apple's Stock apps? It just isnt worth the time to develop the option because it offers no usable benefit. All stories come true bruh! We are yet again witnessing the fall of a flagship product from Apple. First it was the MacIntosh, then the iPod, then the iPad and now the iPhone. Funny how they all came out in that order. Even though Apple release the iPhone before the iPod Touch, the Touch was design and built prior as Jobs admitted. Hwoever, this is what Apple needs to do. They need to complete the design for the iPhone 8 before this year is out and start production no later than the end of Q1 2017. That way when it releases in Aug/Sept, they will have at least 30M to actually ship to customers. Combine that and the increased sales of the 6S due to price drop and Apple will or can sell another 75M phones. If Apple doesn't do this, that it's over. They need to plan ahead for what they claim will be the biggest change in iPhone history, because if it is, they should not be stuck on shipping just 10M and having people wait 8 weeks for a phone. Because if people have to wait what could be a limited anniversary model, they will simply buy something else and Samsung if the OEM who will get MOST of those sales.

posted on May 12, 2016, 2:30 PM 4

18. janis

Posts: 397; Member since: Mar 10, 2014

we all know apple is going down ever since Jobs passed away, every year same design same bs, iphone 5se is just showing frustration from apple, come on such huge company recycling years old models.. guy who did that should be fired. very sad to see company who pioneered touch screen phone now is struggling offering some bs.

posted on May 12, 2016, 3:41 PM 2

50. htcisthebest

Posts: 435; Member since: Nov 15, 2011

Nice point. I wouldn't say they pioneered touch screen phone though, since there are other manufacturers that made touch screen phones before them. But Apple did commercialize touch screen smartphone and made it a big hit.

posted on May 13, 2016, 2:55 PM 0

24. TmoRep

Posts: 107; Member since: Apr 20, 2016

Apples drop in sales and reduce stocks just means one thing to me.... Time to invest in their stocks again and make another 5k or more depending on the Iphone 7 sales.

posted on May 12, 2016, 4:21 PM 1

2. Jimrod

Posts: 1605; Member since: Sep 22, 2014

Good, they need to up their game and not try to just offload a barely different 4.7" "6SS" and whack some new features on the 6+ to make it a 7... By now the leaks will be true and there isn't anything exciting coming this year from Apple.

posted on May 12, 2016, 1:37 PM 2

6. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Next year either. The present Note 5 will still do more than the next 2 iPhone's at least.

posted on May 12, 2016, 2:13 PM 6

10. Jimrod

Posts: 1605; Member since: Sep 22, 2014

Let's see next year...

posted on May 12, 2016, 2:59 PM 1

15. tedkord

Posts: 17293; Member since: Jun 17, 2009

I see what they're trying to do. They want to release a redesign for the 10th anniversary, but they don't want to do a total redesign two years in a row. Unfortunately, that means that their long-term users looking for something new are going to have to wait an extra year.

posted on May 12, 2016, 3:12 PM 0

3. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Oh the no's! DOOMSDAY!!! It's upon us! Seriously though, Apple will be fine. There's another way to look at lower sales right now. There's just that much more opportunity for their big holiday season. Everyone that passed on upgrading recently with a 6S/6S+/6SE may just be that much more enticed by the iP7. It's entirely plausible that the majority that held off on that upgrade will decide to do so for the 2016 holidays. Apple may possibly have the best quarter they've ever had. Any speculation should be held off until after we have this holiday season to compare. At least, Apple better hope they do great during the holidays. :-|

posted on May 12, 2016, 1:45 PM 3

16. darkkjedii

Posts: 30960; Member since: Feb 05, 2011

You're the first person that posted that. +1.

posted on May 12, 2016, 3:35 PM 2

42. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Apple will be fine. I think if they will have another climb if they manage to open up new market e.g India.

posted on May 12, 2016, 9:02 PM 0

46. siddharthayadav202

Posts: 286; Member since: Apr 23, 2016

India.... You guys do know how tough is it to manage Indian market as a company. People in India buy iPhone only for a reason. Showoff. Nithing else. Literally. People are so used to piracy. They still buy apple even though they want to still pirate. They then go for jailbreak. And except for apple and chinese fanboys, Samsung is considere a superior brand tjan even apple by majority. And those who do not, start considering since they buy their first iPhone. My friend was an Apple fanboy. Had ip6. Never used S6 and was always arguing ip6 is better. His mom got S6E. He used for just 7-8 hrs and called me and said S6E is better.

posted on May 13, 2016, 3:06 AM 2

4. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Apple may piss so many people off with the iPhone 7, that they may not even get those people to get the iPhone 8 either. iPhone 8 to bring everything that Android has had for 2-3 years, that everyone called a gimmick and claimed we can live without, to these are now must have a set a bar for features all phones should have. JUST WATCH! Watch how much iPhonaddicts love wireless charging once they get it. Of maybe some type of fast charging system where the iPhone doesn't take 3 hours to charge. Wait until its actually certified water-proof. I can't wait to see the iPhone 8 with its curved glass that everyone thinks is a gimmick and AMOLED panels with 1440p resolutions and all the stuff we've enjoyed for 3 years+. I should just pre-type all my paragraphs right now in preparation for the obvious. Because the chances for Apple to come up with something we've NEVER seen before, is about as possible as Donald trump becoming President of the United States of God Bless America!

posted on May 12, 2016, 2:08 PM 3

21. janis

Posts: 397; Member since: Mar 10, 2014

new innovative retina pro plus uber screen best screen people has ever seen 1440p on iphone 10s on year 2020. the only thing what has change is everything :D u are right on these things tech guy, i could not go back from fast charging, sometimes after long day in office i come home i see 20-30% battery want to go out put on charge 15-20 min and i am good to go.

posted on May 12, 2016, 3:45 PM 1

31. jovy1212003

Posts: 11; Member since: Feb 27, 2016

3D Touch? Siri? Fingerprint that actually works? Apple doesn't innovate my ass!!!

posted on May 12, 2016, 7:38 PM 0

39. DRS1977

Posts: 679; Member since: May 27, 2015

3D Touch is a gimmick and failure. Siri sucks compared to Google Now and Cortana, and finger prints worked before on on other phones. The funny thing is, Apple bought the inventors of Siri and the Fingerprint company. Sorry, they didn't innovate at all.

posted on May 12, 2016, 8:56 PM 1

43. kiko007

Posts: 7493; Member since: Feb 17, 2016

And Google bought Android. Your point?

posted on May 12, 2016, 9:52 PM 0

44. ibend

Posts: 6747; Member since: Sep 30, 2014

the "Android" that google bought is nothing like "Android" that people know right now.. google literally make android OS from the ground up

posted on May 12, 2016, 10:48 PM 0

48. siddharthayadav202

Posts: 286; Member since: Apr 23, 2016

Hahaha.... dumbass... Do you have slightest idea about what android was initially??? Nothing more than java to say the least.

posted on May 13, 2016, 3:16 AM 0

47. siddharthayadav202

Posts: 286; Member since: Apr 23, 2016

You gave your ass to apple to innovate it? Wow... And leave siri... Used on ip6s 2 months ago. Was unable to reply properly to 4 of my statements out of 5. Hello siri was only one she was able to reply.

posted on May 13, 2016, 3:10 AM 0

9. Eraman

Posts: 162; Member since: Dec 13, 2015

Apple is the next  BlackBerry. And that's all

posted on May 12, 2016, 2:48 PM 1

12. Ruturaj

Posts: 1484; Member since: Oct 16, 2014

Nokia.

posted on May 12, 2016, 3:05 PM 1

13. Eraman

Posts: 162; Member since: Dec 13, 2015

Both lose the market

posted on May 12, 2016, 3:07 PM 0

11. Unordinary unregistered

Take a moment and look at how much time Techie has wasted typing away in his man-baby cave.

posted on May 12, 2016, 2:59 PM 4

17. darkkjedii

Posts: 30960; Member since: Feb 05, 2011

Dude lol, I was thinking the same thing. He probably orgasmed when he saw this article. He wants Apple to fail and go outta business so bad, he has wet dreams about it.

posted on May 12, 2016, 3:37 PM 3

23. janis

Posts: 397; Member since: Mar 10, 2014

that is just so stupid, me as customer i dont care, either apple or samsung or htc device will be in my hands, all i care is maximum for my $$, market works simple, more brands bigger competition, so that drives innovations and prices down. samsung and htc pushing really good now, what has apple done last years? i dont care specs here like cpu ram, i have been using iphone 5s as well. i dont need to play games on phone either, simple sh** like battery life fast charging better screen? where is that on iphone??? costs more than any other devices which has these and more features.. i really hope next iphone will have proper screen, and better screen/body and fast charging, and battery which can get me thru all day, since i am ok with that simple OS, does the job.

posted on May 12, 2016, 3:53 PM 1

34. sissy246

Posts: 7065; Member since: Mar 04, 2015

You just can't stand it because even though very long Techie 95% of the time he knows what he is saying.