04 Jan 2019

Crosby Research: TMT – Smartphone Component Sector: Apple's revenue guidance cut, "volume play" suppliers suffer the most

Apple (AAPL US) revised down revenue guidance for FY1Q19 (CY4Q18) from US$89-93bn to approx. US$84bn, represents a cut of 5.6%-9.7%. With FY1Q19 revenue to fall ~4.9% YoY, Apple will record first time YoY quarterly revenue decline since FY4Q16. Management attributed the weaker than expected performance to: 1) strong US dollar which creates headwind to sales in international market; 2)  Greater China market weakness due to China-US trade tension; and 3) fewer IPhone spec. upgrades.