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Shares of Apple’s Suppliers Fall over iPhone Concerns

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Jul. 6 2016, Published 3:50 p.m. ET

Shares of Skyworks, Cirrus, and Qorvo Fall

On July 5, 2016, shares of Apple’s (AAPL) suppliers, including Skyworks Solutions (SWKS), Qorvo (QRVO), and Cirrus (CRUS) fell over concerns about the iPhone. Shares of Skyworks fell by over 6% as Pacific Crest downgraded the stock from “overweight” to “sector weight.”

Skyworks provides RF (radio frequency) solutions to Apple and other smartphone manufacturers. A slowing smartphone market has impacted SWKS’s revenue as well as its profit margins. Analysts at Pacific Crest expect a fall of 15%–20% in iPhone unit shipments in the second half of 2016.

Shares of other Apple suppliers Qorvo and Cirrus fell by 4.9% and 6%, respectively, on July 5, 2016.

Pacific Crest also downgraded Cirrus to “sector weight” from “overweight” status.

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Related ETFs and market capitalizations

The iShares PHLX Semiconductor ETF (SOXX) invests 3.9% of its holdings in Skyworks. The market capitalizations of these companies are as follows:

  • Skyworks Solutions: $11 billion
  • Qorvo: $6.5 billion
  • Cirrus: $2.2 billion

iPhone shipments expected to fall to 227 million in 2016

According to AppleInsider, Apple’s iPhone shipments may fall to 227 million units in 2016 compared to 232 million units in 2015. This will be the first YoY (year-over-year) fall ever for Apple’s flagship product. Brean Capital expects Apple’s total iPhone sales to fall by 16 million units to 216 million units in 2016.

Brean Capital projects shipments of 237 million units for Apple in 2017, exceeding the 232 million units it sold in 2015. This would set a new record for Apple. Ming-Chi Kuo of KGI Securities expects iPhone shipments to fall to below 200 million units in 2016.

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