Not only did Apple suppliers deal with fall in stock value, but this revenue revision is also being touted as "Apple's darkest day."
Apple share prices fell by 10 percent yesterday after the iPhone maker slashed its quarterly revenue forecast. This happened for the first time in more than 15 years as the company is dealing with shrinking demands in China and fewer users upgrading their current smartphones.
Following this, the Wall Street Journal reported that this impacted supplier prices, which went tumbling down as soon as the news hit the stands.
Shares of Apple suppliers dropped - Micron Technology Inc. fell by 3 percent, Cirrus Logic Inc. slid down by 6.4 percent and Lumentum Holdings Inc. was down by 8.2 percent.
The revision rattled investors, who are already concerned about a slowdown in global economic growth, reported the journal.
Apple shares dropped $15.73 on Thursday to close at $142.19, its lowest since April 2017, erasing nearly $75 billion in market value. Apple, which became the first U.S. company to reach a $1 trillion market capitalisation, lost $428.74 billion in market cap since its peak in October 2018.
This announcement “will be a defining moment for Cook & Co. for years to come,” wrote Wedbush Securities analysts, calling the company’s revenue miss “jaw-dropping.”
“In the modern iPhone era, last night was clearly Apple’s darkest day in our opinion and represents a challenging growth period ahead for the company,” Wedbush analysts wrote. While lowering their price target to $200 from $275, the analysts said they were still bullish on the company and maintained an “outperform” rating.
The company had to revise its earnings because of intense competition from Android-based products of the Google ecosystem and Amazon's Alexa-based services.
CEO Tim Cook, in a letter to investors on Wednesday, said that the company will be clocking revenue of about $84 billion for the quarter that ended late last month, a drop of at least $5 billion from the range of $89 billion to $93 billion Apple had been expecting.
The iPhone XR, the lowest-priced model among the three new phones Apple introduced last year, starts at 6,499 yuan ($945). A competing model from Huawei Technologies Co. that also launched last year, Mate 20, starts at 3,999 yuan. This is also where the iPhone maker is losing its sheen in the Indian market in 2018-19 after reporting record growth for the year 2017-2018.
Apple India Private Ltd reported a net profit of Rs 8,96.3 crore for FY18 ended March, up from Rs 3,73.3 crore in the previous year. Documents filed by the Cupertino-based iPhone-maker with Registrar of Companies (RoC) show that the India subsidiary generated a revenue of Rs 13,097.6 crore for FY18, up 12 percent from Rs 11,704.3 crore of revenue it reported in FY 2017.