Peak iPhone? Fewer orders for Apple suppliers could signal first sales decline

The world is falling out of love with the iPhone, it seems. Some of Apple’s main Asian suppliers say the tech giant is seeing a slump in sales. They expect revenues and orders to drop this quarter, indicating iPhone sales are almost certain to post their first annual decline since the flagship product was launched almost a decade ago. The lackluster sales forecasts — by companies that include Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chipmaker, and smartphone camera lens producer Largan Precision — add to concerns about Apple’s outlook amid slowing global demand for smartphones. Reports from major Apple analysts — including UBS, Pacific Crest and Piper Jaffray — also predict a slump in iPhones sales.

Visibility is only a month at a time and demand is quite weak.

Largan Precision chief executive Adam Lin

Industry executives say the latest iPhone did not have enough new features from the previous model to tempt users, raising fears that Apple’s innovative streak — and the profits it generated — may have run its course. Largan called demand weak, while TSMC said it expected an 11% dive in revenue, the steepest fall in seven years. Other suppliers said Apple now only gives them orders one month in advance, instead of the usual three months. "We have to be very flexible in terms of capacity,“ said one executive. Analysts say iPhone sales could pick up during the second half of the year, when the company usually launches new products, but with competitors such as Samsung Electronics and Huawei Technologies Co. Ltd. sharpening their edges, some suppliers are not so sure.

The pace of innovation has slowed. Apple is going toward the same direction as other brand names.

Taiwanese Apple supplier

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