Shares in Apple Inc. and some suppliers fell after a newspaper report said orders for iPhone 8 models have been cut for the rest of the year amid a lukewarm reception.
Pegatron Corp., a contract assembler, fell as much as 2.7% in Taipei trading Thursday while Catcher Technology Co. slipped as much as 3.6%. Apple has cut orders linked to iPhone 8 models by more than 50% over the rest of the year, the Taipei-based Economic Daily News reported, citing people it did not identify. It didn’t elaborate on precisely what sort of orders had been pulled, nor how it arrived at that number.
Apple shares fell 1.6% in premarket trading Thursday in New York. They have risen 38% this year, fueled in large part by expectations for the 10th anniversary iPhone X.
Such an early pullback will have severe impact on a sprawling supply chain that encompasses the likes of Hon Hai Precision Industry Co. and Pegatron as well as smaller components makers from AAC Technologies Holdings Inc. to Catcher and Merry Electronics Co. Apple is holding a staggered release of its newest devices as iPhone 8 models began hitting stores in September while the top-of-the-line iPhone X is expected next month.
“Investors have heard iPhone 8 sales aren’t strong, so suppliers such as Merry and Catcher have been weak. It’s not a surprise. Certainly Hon Hai could rise as it’s the sole assembler of the iPhone X,” said Anderson Chien, a Cathay Futures Corp. executive vice president.
The lowered orders mean shipments of iPhone 8 models could come in at just 5 million to 6 million per month in November and December, the newspaper reported without elaborating.
The news hit Apple suppliers in Europe. AMS AG, which is also involved in 3D sensing components for the new iPhone, fell as much as 5%, extending losses so far this week to 10%. Dialog Semiconductor Plc fell 2.5%.
Apple is also grappling with production hiccups that could disrupt supply for the more highly anticipated iPhone X, the Economic Daily said without citing its sources. The issue at present wasn’t difficulties in securing supply of cutting-edge organic light-emitting diode screens or 3D sensors as initially thought, but of glass panels, the newspaper said.
The 3-D scanner is the iPhone X’s flagship innovation, allowing the handset to be unlocked just by glancing at it rather than requiring a fingerprint or unlock code. Along with a wider, sharper screen, it’s a key differentiator from the next model down, the iPhone 8.
Apple wasn’t immediately available to comment.