PanamaTimes

Wednesday, May 29, 2024

Apple hovers above competition even as smartphone market stumbles, sources say

Apple hovers above competition even as smartphone market stumbles, sources say

The global smartphone market may be in the toilet, but the iPhone 13 continues to sell well, and Apple Inc (AAPL.O) is expecting its upcoming iPhone 14 to do even better at launch.

Apple's slightly higher expectations for the forthcoming iPhone 14 underscore a growing belief among Wall Street analysts that the Cupertino, California company's sales are likely to hold up better than the broader smartphone industry if major economies enter a recession.

Apple, which reports its fiscal third quarter earnings on July 28, conveyed its expectations to suppliers in initial forecasts as it carries out trial production of the iPhone 14, sources with direct knowledge of the matter told Reuters.

With Apple sitting at the higher end of the market, analysts believe that inflation in core items like food and fuel have taken a lesser toll on its relatively affluent user base. That comes as industry watchers such as Fubon Securities Investment Services Co chairman Charles Hsiao believe demand for consumer electronics will slow overall this year and next.

An economic slowdown in China has already taken a huge bite out of the smartphone market, pulling global sales down 10% year over year to 96 million units in May, the most recent month for which full figures were available, according to Counterpoint Research. It's only the second time in nearly a decade that the monthly figure has slipped below 100 million handsets, the firm said.

But two iPhone supply chain sources with direct knowledge of the matter told Reuters that iPhone sales have continued to do well in July despite signs of cooling market demand for other smartphone makers.

"Others are starting to take a hit,” one of the sources said.

The second source said July shipments for the iPhone 13 from one factory were a third higher than July last year. That pattern was especially unusual because sales of current iPhone models tend to slow down in July and August as consumers await new models that Apple traditionally releases in September.

“Judging by shipment, sales of iPhone 13 are fairly good," the second source said.

The iPhone has continued to sell well late into its cycle in part because "China demand rebounded sharply after lockdowns ended and the iPhone was a beneficiary" of a June shopping holiday in China, Cowen analyst Krish Sankar wrote in a note to clients.

In keeping with its annual schedule, Apple has started trial production of the iPhone 13's successor with the goal of ramping up mass production in August so the devices can start shipping in the fall. The initial shipment forecasts Apple has given suppliers is “slightly higher” than that of iPhone 13 a year ago, the second source said.

“It’s slightly higher than last year. It’s good, but not explosively good," the second source said.

For the just-ended fiscal third quarter, some Wall Street analysts are bracing for a slight decline in iPhone 13 shipments even if volumes are higher at some individual factories. But analysts still expect the iPhone to fare better than rivals. Cowen, for example, expects Apple handset shipments to be down about 1% for the just-ended quarter, while overall handset shipments could be down as much as 13%.

The divergence between Apple and the Android market is rippling through Apple's supply chain.

“For Samsung’s display unit, a better-than-expected performance in Q2 is expected due to shipments for iPhones, which is the only smartphone with strong sales,” said Song Myung-sup, analyst at HI Investment & Securities.

Cowen held steady its "outperform" rating on shares of chipmaker Skyworks Solutions Inc (SWKS.O), noting that it gets about 55% of its revenues from Apple for a radio chip in the iPhone. Skyworks rival Qorvo Inc (QRVO.O), by contrast, gets 30% of its revenue from Apple and has greater exposure to the Android phone market. Cowen downgraded Qorvo to "market perform."

"Skyworks’ greater relative exposure to Apple in its mobile business likely insulates the company in the near term from significant impacts associated with ... downward demand revisions," Cowen analyst Matt Ramsay wrote in a note to clients.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
El Salvador's Bitcoin Holdings Reach $350 Million
Teens Forming Friendships with AI Chatbots
WhatsApp Rolls Out Major Redesign
Neuralink's First Brain Implant Experiences Issue
Apple Unveils New iPad Pro with M4 Chip, Misleading AI Claims
OpenAI to Announce Google Search Competitor
Apple Apologizes for Controversial iPad Pro Ad Featuring Instrument Destruction
German politician of the AFD party, Marie-Thérèse Kaiser was just convicted & fined $6,000+
Changpeng Zhao Sentenced to Four Months in Jail
Biden Administration to Relax Marijuana Regulations
101-Year-Old Woman Mistaken for a Baby by American Airlines: Comical Mix-Up during Flight Check-in
King Charles and Camilla enjoying the Inuit voice singing performance in Canada.
New Study: Vaping May Lower Fertility in Women Trying to Get Pregnant
U.S. DOJ Seeks Three-Year Sentence for Binance Founder Changpeng Zhao
Headlines - Thursday, 23 April 2024
Illinois Woman Wins $45M Lawsuit Against Johnson & Johnson and Kenvue for Mesothelioma Linked to Baby Powder
Panama's lates news for Friday, April 19
Creative menu of a Pizza restaurant..
You can be a very successful player, but a player with character is another level!
Experience the Future of Dining: My Visit to an AI-Powered Burger Joint
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
I will never get enough of his videos and the pure joy and beauty of these women!!
Scientists at the University of Maryland have developed an "invisibility cloak", for AI using adversarial patterns on a sweater, making the wearer nearly undetectable to standard object detection methods.
Lamborghini Bids Farewell to Its Best-Selling Sports Car: The Huracán
Sam Bankman-Fried Appeals 25-Year Prison Sentence for $8bn FTX Fraud
OJ Simpson, ex-NFL star who was acquitted of murder, dies aged 76
British Backpacker Imprisoned in Notorious Bolivian Prison: Family Raises Funds for Legal Fight and Essentials
Argentina: Venezuela Cuts Power to Embassy after Opposition Meeting
El Salvador Offers 5,000 Passports to Skilled Foreign Workers: Tax-Free Relocation and Citizenship
Panama Papers Trial Begins: Founders of Mossack Fonseca Face Money-Laundering Charges
75 Becomes the New 65: Retiring in Your 60s Unrealistic as Life Expectancy Increases and Costs Rise
Total Solar Eclipse of 2021: 32 Million Witness the Mystical, $1.5bn Spectacle Sweep Across North America
New shopping experience…
New world, new reality, let’s get used to it
UK Company Passes Milestone in Developing Space-Based Solar Power, Aiming to Power a Million Homes and Provide Constant Energy
Mexico Breaks Diplomatic Ties with Ecuador after Police Storm Embassy, Arrest Former Vice President
Monty Python were so ahead of their time
If there's a will, there's a way!
Rules about how to dress are important, but not so much if you have a lot of money.
Body Armor Firm Showcases Stab-Proof Vest in Demo on CEO
Mexico Cuts Diplomatic Ties with Ecuador After Embassy Stormed in Quito
Here is a tattoo idea, for engineers
Zoraya Ter Beek, a 28-year-old woman from the Netherlands, will undergo euthanasia in May due to severe mental health challenges
Here's a video featuring Fidel Castro, where he discusses his stance against war and his commitment to preserving life, positions that have put him at odds with the USA:
Woman reaches behind and steals gun from a security guard and shoots three people while getting detained in Chile
Take a walk around the safe and thriving downtown San Salvador.
Joe Biden criticised by Trump campaign for declaring Transgender Day of Visibility on Easter Sunday
Macron says France will help Brazil develop nuclear-powered submarines
A video demonstrating women's self defense class in 1930
×