14 DAY TRIAL // It’s no longer a secret that iPhones aren’t selling exactly as good as anticipated, and one of the consequences of weaker demand is a substantial revenue drop expected by Apple suppliers.
TSMC, which makes iPhone chips, is now projecting an up to 16 percent revenue decline in the first quarter of 2019, and one of the reasons is the reduced orders from Apple.
Cupertino originally anticipated stronger sales for the 2018 iPhone lineup, but earlier this month, people familiar with the matter revealed the company decided to cut production in order to deal with the slower demand for the new generation.
Specifics on how significant these production cuts were haven’t been offered, but TSMC appears to be particularly hit. An inventory correction at its graphics chip clients is also likely to generate a revenue decline, according to a report from Digitimes.
Apple’s emergency measures
But before TSMC’s revenues will go down, they are predicted to reach an all-time high in the fourth quarter of 2018, once again partially thanks to the company’s contract with Apple. Revenues could go somewhere in between $9.35 billion and $9.45 billion, the report adds, and this represents an approximately 11 percent increase as compared to the previous year.
Like its suppliers, Apple itself is struggling to deal with slow iPhone demand, and Cupertino is even believed to be pondering bringing back the iPhone X to the market.
iPhone X, launched in September 2017, was retired this year after Apple launched the new-generation models, namely the iPhone XS and iPhone XS Max. However, it was speculated that iPhone X production would resume soon, with Apple planning to bring the device back to the market at a lower price.
Furthermore, some price cuts for carriers in specific markets like Japan are also under consideration, according to sources with knowledge of the matter, as 2018 iPhones have a hard time selling in big numbers.