Apple supplier Skyworks has long been seen as a bellwether for iPhone demand, and the company is now delivering some bad news to investors. While Skyworks does not break down its revenue by customer, it has been a long-time partner of Apple, producing wireless components for the tech giant. However, it is believed that Skyworks is not the sole supplier of any component to Apple, so a decline in its sales does not definitively prove a waning public interest in iPhones. Nevertheless, Skyworks CEO Liam K. Griffin has informed investors that the decline in demand for smartphone components is evident. As a result, the company is planning to further diversify.
"In a challenging macroeconomic environment, Skyworks has achieved solid performance and strong cash flow. In March, our mobile business experienced lower-than-normal seasonal trends, with end-market demand falling below expectations.
Looking ahead, we plan to leverage our connectivity technology in edge-connected IoT devices, automotive electrification, advanced security systems, and AI infrastructure.
Skyworks CFO Kris Sennesael provided guidance for June, stating that performance for the quarter is also expected to be 'below normal seasonal patterns.' However, Sennesael also noted that this is mainly due to excess inventory gradually clearing.
Both Skyworks and Apple did not disclose the quantity or specific types of wireless components involved. However, regardless of the component or manufacturer, Apple has a history of bulk and advance purchases, especially in previous collaborations with TSMC.
Therefore, apart from multiple suppliers, there are different time scales to consider. A decrease in Skyworks' component sales in the most recent quarter does not necessarily mean a decrease in Apple's component usage during the same period.
Apple is set to release its financial report on May 2, 2024."
