Apple Signals Slowdown to Suppliers, Stock Sinks (AAPL)

Apple AAPL Stock

Apple (NASDAQ:AAPL) saw its stock tumble almost 2 percent in premarket trading on Friday – a move that pulled the Nas lower by 0.45%. The drop came after Japan’s Nikkei newspaper reported that Cupertino has told its suppliers to prepare roughly 20% fewer iPhone components in the second half of 2018.

The publication, citing unnamed industry sources, said the iPhone maker is taking a “cautious” approach toward upcoming iPhone shipments this year. In fact, the report notes that Apple prepared for up to 100 million units of its new iPhone models in 2017 but is only expecting to ship 80 million of this year’s new models.

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” one supply chain source told the paper. “For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.”

According to Apple’s most recent data, worldwide smartphone shipments slightly declined for the first time in 2017, falling 0.3% to 1.46 billion units, and that iPhone sales contracted by 1% at the end of last year.

Apple is reportedly set to release the successors to the iPhones 8, 8 Plus and X – its first smartphone equipped with an organic light-emitting diode display – in September 2018. This is in line with Cupertino’s usual habit of launching a new flagship iPhone every September.

Shares of iPhone suppliers Cirrus Logic Inc. (NASDAQ:CRUS) and STMicroelectronics NV (NYSE:STM) were also down in pre-market trading. During regular hours both names including AAPL – which has gained 25% year-over-year and 12% year-to-date – continue to be in the red: 3.50%, 0.90% and 1.35%, respectively.

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