Lumentum's outlook comes a week after Nikkei reported that Apple was cancelling a production boost for its iPhone XR line, and less than two weeks after Apple's fourth-quarter results showed tepid unit sales growth. Apple didn't immediately reply to a request for comment late Monday. "Apple got cautious in their guidance and it's hitting their suppliers", he continued.
Lumentum blamed the cut in numbers it gave initially been just 12 days ago on a client that was "one of our largest. for laser diodes for 3D sensing", which analysts said could only be Apple.
Apple said earlier this month it would stop giving the number of iPhones, iPads and Mac computers it sold in a quarter, a closely watched metric and a key indicator of the company's success.
This isn't the first sign of bad news for the latest iPhones.
"We think there is an inventory component that is still negatively affecting the supply chain", UBS said, indicating that Apple may be as many as 10 million units shy of what Wall Street had initially expected.
"It is hard to give Hon Hai a positive rating", said Arthur Liao, an analyst at Fubon Securities, who characterised the result as neutral with most investors concerned about the outlook.More news: Amazon agrees to list iPhone, iPads, other Apple products
At its iPhone launch event in September, Apple introduced the lower-cost iPhone XR, made of aluminum, along with two other models, the XS and XS Max. "The Apple investment paradigm is moving away from a focus on device sales toward a more predictable services-driven business". Lumentum's chips are not used in phones older than last year's iPhone X.
Apple CEO Tim Cook was directly asked about this possibility during Apple's most recent conference call.
"The stock is too expensive given that the iPhone isn't selling well", Michael On, president of Beyond Asset Management Co., said before the earnings release.
Citi also cut its target on Qorvo on Monday due to iPhone XR weakness.
"To account for this new information, we are reducing our iPhone XR/XS Max/XS units estimate, while increasing estimates of lower priced iPhone units", the Goldman analysts wrote in a note distributed on Tuesday.
"Longer-lasting products could lead to higher customer satisfaction, potentially enable Apple to charge higher prices for its devices, and would help fulfill the company's environmental objectives", Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., wrote Monday in a note to investors.