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Taiwanese Apple Suppliers Face Falling Stock Prices Amid Ongoing Concern Over Weakened iPhone X Demand

Three major Apple suppliers faced falling stock prices on the Nikkei Asia300 Index today, believed to be directly related to "concerns over demand for iPhone X." The three Taiwanese suppliers were Largan Precision, Hon Hai Precision Industry (Foxconn), and Taiwan Semiconductor Manufacturing Company, dropping 4.4 percent, 1 percent, and 3 percent on the index, respectively.

iPhone X demand concerns and decline in supplier stock prices came after the latest analyst report by JP Morgan yesterday, predicting "slashed" iPhone X orders in the first part of 2018. In a research note reported by CNBC, analyst Narci Chang said "high-end smartphones are clearly hitting a plateau this year," singling out Apple by forecasting that iPhone X manufacturing "might be down 50 percent quarter-over-quarter."

Reports of "weakened" iPhone X demand heading into 2018 began emerging late last year, mainly stemming from analyst belief that the high price of the device would eventually lead to reduced sales after early adopters got their iPhone X. These reports have caused several Apple suppliers to be anxious over low order visibility for the full range of iPhone 8, iPhone 8 Plus, and iPhone X models in Q1 2018. CLSA analyst Nicolas Baratte argued that the reported reduction of the iPhone X's Q1 2018 shipment forecast from 50 million units down to 30 million units "remains inflated."

Despite multiple stories about the iPhone X's plateaued demand in early 2018, the smartphone is believed to have sold well following its fall launch in 2017 and throughout the holiday season. Research data shared just yesterday by Canalys reported that Apple shipped 29 million iPhone X units in Q4 2017, making the device the "world's best-shipping smartphone model over the holidays."

Earlier in January, Kantar Worldpanel said that the iPhone X saw "stellar" performance in several countries during November of last year, though it was outsold by the iPhone 8 and the iPhone 8 Plus in the United States. Combined, Apple's three new iPhones captured the top spots for best-selling smartphone models during the month. Kantar's global OS data pointed towards "staggering" demand for the iPhone X in China from users said to be switching sides from rival smartphone makers.

We should get a better view of how the iPhone X sold soon, when Apple reveals its earnings results for the first fiscal quarter of 2018 on Thursday, February 1.

Related Roundup: iPhone X
Buyer's Guide: iPhone X (Buy Now)

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MacBook Pro not expected to receive any major hardware upgrades this year

Apple’s MacBook Pro, which was thoroughly redesigned in 2016 with Touch Bar, new CPUs, GPUs and storage and more, reportedly will not be seeing any major hardware bumps this year.... Read the rest of this post here

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Foxconn to See More MacBook Orders From Apple in 2018 Despite No Major Upgrades to Line-Up Planned This Year

Apple supplier Foxconn could be about to land a large number of additional MacBook orders this year, according to upstream supply chain sources (via DigiTimes). The increase could come at the expense of Quanta Computer, which has been Apple's major MacBook manufacturer in recent years.

Taiwan-based Foxconn has reportedly been working to boost its chances of notebook orders from Apple by offering attractive quotes, while Apple has not majorly upgraded its MacBook range since 2016's Touch Bar MacBook Pros, and is said to have no plan for one in 2018. Apple will therefore switch MacBook orders to Foxconn for models that are already in mass production as a way to save costs and reduce risks, according to the sources.

Foxconn is expected to begin mass shipments to fulfill the new orders in the second quarter of 2018, said the sources. Foxconn and Quanta both declined to comment on their clients or orders. The sources pointed out that Apple started outsourcing the assembly for some of MacBooks' components to Foxconn's plants in Shenzhen, China in the second half of 2017.
Despite the news, Quanta is expected to remain Apple's biggest supplier going into 2018. According to DigiTimes' research, out of 15 million MacBooks shipped to Apple a year, the shipment ratio between Quanta and Foxconn has been at around 8:2 for the past five years. Last year alone, Quanta had a 79.5 percent share and Foxconn took 20.5 percent.

Quanta is said to be looking to other brand vendors to offset the impact of the loss of orders, as it aims for similar growth to the market average in 2018. The Taiwan-based firm shipped 38.7 million notebooks last year, up 5 percent on year, and is currently the largest notebook supplier for Hewlett-Packard (HP), Apple, Acer and Asustek Computer.

Quanta also maintains orders from Apple for Apple Watch, and is said to be teaming up with Israeli-based augmented reality company Lumus to manufacture lenses for smart glasses. It's not clear if Quanta and Lumus are working with Apple on a future AR headset or smart glasses, but it is a possibility as rumors suggest Apple has a wearable augmented reality product in the works.

Related Roundups: MacBook Pro, Apple VR Project
Buyer's Guide: MacBook Pro (Caution)

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Reports of Apple slashing iPhone X forecast send shares in suppliers tumbling

Shares in several of Apple’s Asian suppliers fell for a second straight day on Tuesday following a report from Taiwan’s Economic Daily and some analysts saying that iPhone X demand could come in below expectations during the first quarter of next year.... Read the rest of this post here

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Ming-Chi Kuo: improved iPhone X shipping times are not due to weak demand, but improvements in the supply chain

iPhone X shipping times saw improvements to one to two weeks across the board this week. This triggered speculation that weak demand for Apple’s latest flagship might have been the cause of these improved delivery dates.

Ming-Chi Kuo of KGI Securities refutes this speculation, instead reporting that Apple has made significant supply chain improvements that are responsible for these accelerated shipping estimates.... Read the rest of this post here

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