Fewer orders at Apple suppliers could signal first iPhone sales decline

Fri Jan 22, 2016 12:51pm EST
 
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By J.R. Wu

TAIPEI (Reuters) - Some of Apple Inc's main Asian suppliers expect revenues and orders to drop this quarter, indicating iPhone sales are almost certain to post their first annual decline since the flagship product was launched almost a decade ago.

The forecasts of lackluster sales by companies including Taiwan Semiconductor Manufacturing Co (TSMC), the world's biggest contract chipmaker, and smartphone camera lens producer Largan Precision Co Ltd add to concerns about Apple's outlook amid slowing global demand for smartphones.

Industry executives say the latest iPhone did not have enough new features from the previous model to tempt users, raising fears that Apple's innovative streak - and the profits it has generated - may be running its course.

Apple, which reports December-quarter results on Tuesday, declined to comment on its sales outlook.

"Visibility is only a month at a time and demand is quite weak," Largan Precision Chief Executive Adam Lin told an earnings briefing, referring to his company's overall business.

Other suppliers said Apple now only gave them orders one month in advance, instead of the usual three months.

"We have to be very flexible in terms of capacity," said an executive at one of those firms, declining to identify their company or be named due to a confidentiality agreement that prevents Apple suppliers from discussing its order book.

Apple has previously said that individual data from its supply chain was not an accurate reflection of its outlook.   Continued...

 
An iPhone 6S Plus is seen at the Apple retail store in Palo Alto, California September 25, 2015.  REUTERS/Robert Galbraith