Goldman Sachs reportedly estimates Apple will produce 6 percent fewer iPhones next year than previously expected after key supplier Lumentum reduced its shipment outlook.
"We are concerned that end demand for new iPhone models is deteriorating," CNBC cited Goldman as saying in a note. "We note this could easily right itself given the bulk of demand comes in late December but we feel more prudent sell through forecasts are warranted due to the timing and magnitude of this warning."
Apple shares fell to their lowest in more than three months on Monday as three suppliers issued warnings on results that pointed to weakness in iPhone sales.
The Cupertino, California company’s signature product has become pricier with every new launch and analysts say that consumers, especially in emerging markets such as India, are ditching them for cheaper alternatives like those offered by China’s OnePlus, Reuters reported.
Apple warned earlier this month that holiday sales would miss Wall Street expectations, blaming the fall on weakness in emerging markets and foreign exchange costs.
Lumentum Holdings, the main supplier of the Face ID technology in the latest generation of iPhones, cut $70 million off its forecasts for revenue on Monday, knocking another 5 percent, or around $50 billion, off Apple’s value in morning trade on Wall Street, Reuters explained.
Screen maker Japan Display Inc. cited lower smartphone demand in cutting its own outlook, while British chipmaker IQE Plc also said it expects a material reduction in its financial performance in the current year.
In late Monday trading, Apple shares (AAPL) were down $10.30, or 5 percent, at $194.17. In the last year, Apple shares have hit s high of $233.47 and a low of $150.24.
The general outlook for Apple hasn't always been this gloomy.
Within the past month, longtime technology analyst Dan Ives reportedly predicts Apple Inc.’s stock price can soar at least 40 percent from its level of $220 in mid October.
"Many of the growth fears on the Street have been alleviated around Apple in the near term," Ives, now at Wedbush Securities, told CNBC.
The analyst says he wouldn't be surprised to see 350 million iPhone units upgraded over the next 12 to 18 months.
"With positively trending average selling prices that we believe can approach about $800 in fiscal 2019 and healthy gross margins heading into this 2019 product cycle that are showing no signs of abating ... we believe many of the growth fears on the Street have been alleviated around Apple in the near term," Ives said in a note to clients Thursday.
The analyst also highlighted the company's services business as an area where he expects growth in the coming years.
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