Skyworks, a major supplier of wireless components to Apple, has just raised a red flag. When presenting its latest quarterly results, the company’s CEO, Liam K. Griffin, reported a decline, the latter being marked by the demand for smartphone components. This indicator is often considered a barometer of iPhone sales.
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A Serious Warning for Investors
It is true that Skyworks does not break down its revenues by customer, but the firm has long been a preferred partner of Apple for the supply of wireless network components. His statements on the slowdown in demand should therefore worry investors in the Apple brand.
“During the March quarter, we saw below-normal seasonal trends for our mobile business, with final demand lower than expected,”
Liam K. Griffin.
He did not hesitate to mention a “difficult macroeconomic environment.”
Diversification to Compensate for the Slowdown
Faced with this alarming observation, Skyworks is now considering accelerating its diversification to compensate for the slowdown in demand for smartphones.
“In the long term, we intend to leverage our connectivity technology in other sectors such as IoT, automotive electrification, and advanced driver assistance systems, as well as AI infrastructure,”
continued the leader.
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Gloomy Forecasts for the Current Quarter
The short-term outlook is hardly more encouraging. The financial director of Skyworks, Kris Sennesael, has, in fact, warned that the current quarter should also experience results “lower than normal seasonal trends,” mainly due to an excess of inventory to be sold.
A Photograph at a Moment in Time
However, these worrying statements should be qualified. Indeed, let us point out that neither Skyworks nor Apple communicate on the volumes or specific types of components concerned. In addition, the Cupertino company has a habit of placing large bulk and advance orders with its suppliers.
So single-quarter sales declines at Skyworks do not necessarily reflect a downward trend in iPhone production volumes over the same period. We will have to wait for Apple’s results, expected on May 2, to have an overall vision.
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A Warning Signal That Should Not Be Ignored All the Same
Still, Skyworks’ warnings, combined with recent rumors of production cuts at other partners like Foxconn, cannot be completely ignored. They could well sound like the first warnings of a slowdown in demand for the iPhone. And this, whether on an occasional or more lasting basis.
This prospect, if confirmed, would have serious consequences for Apple and its investors. The Cupertino giant will, therefore, be eagerly awaited on its short-term forecasts, hoping for him that the fears of his suppliers do not materialize.