Apple shares drop on iPhone suppliers' warnings

Apple's 2019 iPhones will reportedly adopt new antenna tech

This led Apple's shares to drop by 5 percent.

The report noted that Apple's directive translates to about 100,000 fewer iPhone XRs being made each day.

Premium prices and average technology are coming back to haunt Apple and their suppliers who are now facing falling share values, closed production lines and a grim future if Apple iPhone sales don't pick up.

Goldman Sachs analysts have slashed their iPhone unit sales estimate by 6% and downgraded their price target after Lumentum, which makes a part needed for Apple's Face ID camera on the new iPhones, said that a major customer, believed to be Apple, had drastically cut its order.

Most of the new iPhones are priced at $999 and up, with the tricked-out iPhone XS Max going for as high as $1,449.

Apple's stock dropped yesterday when news broke that one of its main suppliers reduced its outlook for the rest of the year, citing reduced orders from one of its biggest customers.

Apple is increasingly touting its base of 1.3 billion installed devices, rather than how many iPhones it sells each quarter.

At its iPhone launch event in September, Apple introduced the lower-cost iPhone XR, made of aluminum, along with two other models, the XS and XS Max. In other words, whether or not iPhone XR sales are above or below projections is arguably irrelevant as long as Apple keeps finding ways to boost revenue, which is clearly more important than how any one specific iPhone model is doing in the marketplace. Apple said it preferred to focus on its transition to a services company, with regular recurring revenue.

"Over the past 10 years, Apple's iPhone ASP has increased a dramatic $220, or 40%, reflecting its growing value to both consumer and business markets, but almost HALF of all that just came in FY18 alone, making a period of digestion now likely".

The driver of the projected sales slump is that Apple's new $749 phone, the lower-end iPhone XR, might not be the hot seller that Apple had hoped, and the company may be cutting orders for the device.

Citi also cut its target on Qorvo on Monday due to iPhone XR weakness. He said said the company share price would have to fall to $170 before it would be a good deal.

Jobs, for all his faults, did manage to save Apple with a couple of products which worked - the iPod and iPhone - but even he was running out of ideas before the end (iPads anyone?) and the issue of what to do next was never resolved.

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