Apple losing crown of top phone maker ripples through supply chain
Bloomberg Market Specialist Jeffrey Hernandez contributed to this article. The original version appeared first on the Bloomberg Terminal.
Background
Apple Inc. lost its title as the world’s largest smartphone maker in the first quarter, and the decline in shipments bodes poorly for its supply chain.
Apple’s smartphone shipments fell about 10% in the first three months of 2024, data from research firm IDC showed on Monday. Samsung Electronics Co., which is investing $44 billion in U.S. chips, reclaimed the top global spot, while Chinese rivals gained market share. Apple smartphone sales in China fared even worse in Q1, down by 19%. Apple has fallen to third in Chinese market share even as the total market has expanded by about 1.5%.
The issue
The consensus forecast by analysts for iPhone shipments is 51.7 million units for the quarter ended March 31. The lowest estimate is 43.1 million units. The company shipped 50.1 million iPhones in the first three months, according to IDC’s preliminary figures. The 9.6% year-on-year drop would be the steepest for Apple since Covid lockdowns snarled supply chains in 2022, the IDC researchers said.
Apple’s iPhone sales are forecast by analysts to see flat year-on-year growth over the next couple of quarters. Meanwhile, Samsung Electronics and Lenovo are predicted to see stronger growth in quarterly handset sales. The resurgence of Chinese rivals and a Beijing ban on foreign devices in the workplace have all weighed on Apple’s sales.
Shares of Apple’s main suppliers have tanked. Hon Hai Precision Industry Co., which gets 55.4% of its revenue from Apple, saw a 4.8% one-day drop in share prices.
Tracking
Use MODL — enhanced with an updated interactive calculator — to gauge the impact of Apple’s shipment slump on revenues and its supply chain.
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