American tech giant Apple (AAPL) started 2019 on a negative note. The company’s CEO, Tim Cook, announced a cut in its guidance for the first quarter (which ended on December 29, 2018) on January 2. The news triggered a steep sell-off in AAPL on January 3.
As of January 18, the stock was trading with a 0.6% month-to-date loss against the 6.5% and 7.9% gains seen in the S&P 500 Index (SPY) and the NASDAQ Composite Index (QQQ), respectively. Let’s take a look at a recent update for Apple.
Earlier today, a Wall Street Journal report citing unnamed people familiar with Apple’s production plans said that the company “is likely to drop LCD displays altogether in its 2020 iPhone lineup.” Instead, the company plans to use OLED (organic light-emitting diode) displays in its smartphones to “allow for more flexible handset design.”
The report also stated that the Japanese LCD (liquid crystal display) supplier for the iPhone XR, Japan Display, is facing the heat of Apple’s slowing sales and is expected “to seek a bailout from an investor group from China and Taiwan.”
Japan Display’s worsening situation is a prime example of the significant risks Apple’s suppliers are exposed to as a result of its weakening iPhone demand.
Apple is scheduled to announce its first-quarter earnings results on January 29. Today at 12:43 PM EST, Apple stock was down 1.1% from its previous day’s closing price. At the same time, other tech stocks Microsoft (MSFT), Alphabet (GOOG), NVIDIA (NVDA), Qualcomm (QCOM), Intel (INTC), Amazon (AMZN), Facebook (FB), Netflix (NFLX), and Advanced Micro Devices (AMD) were down 1.4%, 1.7%, 4.0%, 1.9%, 1.9%, 2.3%, 1.0%, 2.6%, and 2.9%, respectively.