(Bloomberg) -- Investors seeking to gauge demand for the iPhone last quarter got clues Wednesday from Qualcomm Inc. and Broadcom Ltd., two of Apple Inc.'s biggest suppliers.
Both companies indicated that orders related to the iPhone tailed off more than normal at this time of year. That helped round out a flurry of reports in recent weeks that suggested demand for the flagship handset hasn't met rosy predictions, dragging on Apple's shares.
Qualcomm said that orders from a large customer tailed off at worse-than-typical levels in the quarter. San Diego-based Qualcomm didn't identify the company, but the remarks were widely interpreted as referring to Apple. Broadcom said it expects a “greater-than-seasonal decline in wireless” components, indicating fewer-than-anticipated sales of its chips for its fiscal second quarter, which ends in April. Broadcom provides wireless network and Bluetooth components for the iPhone. Christopher Rolland, an analyst at Susquehanna Investment Group, pegged Apple as the reason for the order slowdown in a note Wednesday.
Apple reports earnings after the close of trading. Analysts have projected revenue of $84 billion to $87 billion for the holiday quarter, including from its new flagship iPhone X, which went on sale in November. However, supply chain reports have indicated that the Cupertino, California-based technology giant has cut iPhone X orders in half for early 2018. Multiple analysts also have said the iPhone X was not the holiday smash hit that some expected.
The company's stock gained 48 cents to $167.91 as of 1:30 p.m. in New York. Through Wednesday, it had declined 6.6 percent since reaching a record Jan. 18 as talk of an iPhone slump set in. BMO Capital Markets downgraded its rating on the stock Wednesday. Ming-Chi Kuo, at KGI Securities, recently warned that iPhone X sales weren't as strong as anticipated in China. JPMorgan wrote that "demand has gone sour quickly," and a survey by Consumer Intelligence Research Partners found iPhone X models made up just a fifth of iPhone sales in the holiday quarter.
A smaller supplier, Qorvo Inc., predicted current quarter sales of as little as $645 million, missing analysts' estimates by more than $100 million. Qorvo makes radio-frequency chips and gets about 40 percent of its sales from Apple, according to data compiled by Bloomberg.
Apple declined to comment on the suppliers' forecasts.
A survey of seven analysts from Bloomberg estimates that Apple shipped 80 million iPhones in the holiday quarter of 2017, with an average iPhone selling price of $767, up from $695 a year earlier.
To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net, Ian King in San Francisco at ianking@bloomberg.net.
To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Andrew Pollack, Reed Stevenson
©2018 Bloomberg L.P.
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