Although the iPhone was the hottest seller on the Shuangxi Ali platform this year, both suppliers and analysts signaled that the outlook was worse than expected, and Apple (194.17, 10.30, 5.04%) shares fell sharply.
On Monday, 12 U.S. Eastern Time, Apple opened lower, falling more than 2.6%. At one time, it fell below $193.80 in early trading, a new intraday low since July 31. The intraday decline expanded to more than 5%. Finally, it closed down 5.04%. It closed at $194.17, a new low since July 31. Apple supplier's share price has collapsed. Lumentum fell 32.98%, Universal Display 13.07%, Lingyun Semiconductor 13.86%, Synaptics 8.21% and Qorvo 6.38%.
Prior to that, two apple suppliers Lumentum and Japan Display lowered their performance expectations. JPMorgan Chase lowered Apple's target price, while Citigroup sharply lowered an Apple supplier's target price as it looked down on the XR performance of the iPhone.
Before Monday's session, Lumentum, a technology supplier, downgraded its performance outlook for the fourth quarter of the Gregorian calendar year. Alan Lowe, CEO of Lumentum, said that one of the company's major customers was demanding a substantial reduction in product shipments.
Although Lowe did not know exactly which customer it was, the market quickly focused on apple. Because Lumentum makes components for FaceID and front-end cameras that enhance real-world technology for new iPhone products. As for the second quarter of the Gregorian calendar report for fiscal year 2018, Lumentum ranked Apple as the largest customer, accounting for 30% of the company's revenue. Therefore, Lowe's position is seen as a hint of Apple's poor performance.
Coincidentally, Japan Display, an iPhone display supplier and Japanese company, reported losses for six consecutive quarters on Monday, lowering its annual performance forecast, reducing its annual sales growth rate from 10-12% to 5-15% and its expected operating profit margin from 2-3% to 1-2%.
Samik Chatterjee, an analyst at J.P. Morgan Chase, cut Apple's target price for the second time this month from $270 to $266 before Monday's session, keeping the overrated rating unchanged. On February 2, he lowered his target price from $272 to $270, citing fears that the appreciation of the dollar would increase the price of the iPhone's foreign currency.
This week Chatterjee downgraded Apple's earnings expectations, arguing that weak macroeconomic conditions in emerging markets such as China and a stronger dollar are affecting iPhone sales. He cut the expected sales of the iPhone to 214 million units and 218 million units this year and next, down 2 million units and 10 million units respectively, and cut the expected earnings per share of Apple by $0.1 in 2019 and 2020.
Earlier Monday, Citigroup analyst Atif Malik downgraded Skyworks Solutions, Apple's semiconductor supplier, from buying to negative, slashing its target price by nearly 27% to $85. Citigroup said the cut in Skyworks Solutions was partly due to weaker demand for smartphones in China and disappointing sales of pre-ordered XR iPhones since October, which could affect Skyworks Solutions'product sales growth next year.
In addition, Longbow Research, an institutional research firm, also mentioned that iPhone may not perform well in the Chinese market. It believes that iPhone is facing the potential risk of falling demand in China.
"The iPhone has begun to show some signs of risk, with orders slowing year-on-year, and the trend of Baidu's (180.43, 3.32, 1.81%) search for the iPhone has also turned red," Shawn Harrison, an analyst at Longbow Research, wrote in a report that Baidu's search for the iPhone "fell in a straight line in October, demonstrating a decline in demand in China. Potential risk of shrinkage ".
On the 5th of this month, Apple's share price fell below $200 for the first time in three months and its market value fell below the $1 trillion mark. In a previous Japanese transaction, on February 2, Rosenblatt Securities, Bank of America Merrill Lynch and RBC (72.01, 0.60, 0.83%) had all been downgraded by the capital markets.
At that time, Rosenblatt Securities and Merrill Lynch all lowered Apple's rating to neutral. Bank of America Merrill Lynch lowered its target price from $235 to $220, RBC from $250 to $240, and still ranked it as a winner.
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