Business Technology

Sunday 11 December 2016

Apple's iPhone sales look on course for first ever annual drop

JR Wu

Published 24/01/2016 | 02:30

iPhone sales are almost certain to post their first annual decline since the flagship product was launched almost a decade ago. Photo: Ella Hanochi
iPhone sales are almost certain to post their first annual decline since the flagship product was launched almost a decade ago. Photo: Ella Hanochi

Some of Apple's main Asian suppliers have indicated that they expect to see revenues and orders 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.

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

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

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

"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.

But TSMC, which makes some of the chips that go into iPhones, forecasts this month that its first-quarter revenues would likely fall by up to 11pc year-on-year, adding that demand for high-end smartphones would also be weak.

An 11pc quarterly decline would be the steepest revenue drop for TSMC in almost seven years, Thomson Reuters data shows.

Reuters

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