Apple Suppliers ‘Cautious’ About Orders For iPhone XR, Flagship Models

Apple’s Taiwanese suppliers are cautious about orders for the 2018 lineup of iPhones because it’s still not clear if there’s really strong demand for the new flagships — the iPhone XS and iPhone XS Max — and the upcoming iPhone XR for the remainder of the year. In addition, they also fear that the ongoing trade war would negatively impact overall demand for smartphones.

Industry sources disclosed to Digitimes Tuesday that Apple’s iPhone suppliers in Taiwan have opted to remain cautious about unit orders from the Cupertino giant even though the iPhone XR is scheduled to launch in the second half of this month.

Suppliers are reportedly not that optimistic about the iPhone XR’s market performance despite that fact that this model is going to be the most affordable variant out of the 2018 lineup. Sources said the suppliers are anticipating a slowdown in Apple’s orders should the iPhone XR fail to stimulate overall demand for the new iPhones.

The Taiwanese suppliers are also worried that the performance of the new iPhones could be seriously impacted by the trade war between the U.S. and China. Thus far, overall demand for smartphones have been decelerating and things could get worse in the remaining months of 2018.

According to industry sources, the suppliers of Apple’s new iPhones are expected to post weak sales for the fourth quarter. Among the companies that are likely to do this is TSMC, who is already believed to be generating lower-than expected revenues in the final 2018 quarter.

Another company that was named by suppliers is Largan Precision, the supplier of the camera lens for Apple’s new iPhones. The company recently divulged that its shipments are very likely to decrease this month and drop further in November.

The news comes a day after Goldman Sachs analyst Rod Hall suggested in an investor’s note that declining iPhone sales in China could lead Apple to report disappointing earnings for its third quarter. “There are multiple signs of rapidly slowing consumer demand in China which we believe could easily affect Apple’s demand there this fall,” Hall stated in the note obtained by CNBC.