Apple Shares Fell on Fears of Weak Demand

By Joyce Yu

Philadelphia, PA–Despite being one of the top picks of Warren Buffet, Apple’s shares opened sharply lower Friday on a Nikkei report that the company told suppliers to manufacture 20% fewer components for its upcoming iPhones.

Apple is taking a “cautious approach,” telling suppliers to prepare for 80 million iPhones, Nikkei reported. This is compared with last year when Apple told suppliers to prepare for shipments of 100 million iPhone 8, iPhone 8 Plus and iPhone X devices. Apple shipped 52.2 million iPhones during the first three months of 2018, an increase of just 3% compared to the same period a year earlier. It was expected to sell 53 million iPhones.

Apple has a tradition to introduce new iPhones in the fall. For the next generation of iPhones, there have been reports say all new iPhones will have FaceID cameras and the higher-end models will have bright OLED displays, similar to the iPhone X.

Nasdaq drifted lower on the Apple report with semiconductor companies including Advanced Micro Devices and Qualcomm both falling. Once touted as the most innovative company in the world, Apple, however, seems to have become less popular than it’s used to be among tech peers. CNN’s Innovation Economy Newsletter PACIFIC recently named five companies which own the future, and Apple is not one of them.

The five companies – Alibaba, Alphabet, Amazon, Facebook and Tencent- are likely to have immeasurable influence over politics, given their spending power and lobbying resources, and culture, given the infiltration of their products and services into nearly every aspect of our lives, the report notes.

This echoes McKinsey Global Institute’s assessment that these companies have a long-term “insurmountable advantage” because of their ability to invest heavily in future technologies like AI and robotics.

For the two Chinese company that make into the list, New York Times’ Raymond Zhong opined, Tencent and Alibaba “are ratcheting up their no-holds-barred contest to dominate the ways 770 million internet users communicate, shop, get around, entertain themselves and even invest their savings and visit the doctor.”

On the other hand, “Apple is considered more vulnerable to competitive disruption, despite the fact that it tops the tech world in revenue, profit and market capitalization,” as noted by Wall Street Journal’s Christopher Mims.