Here is why iPhone demand is likely to cool down

Barclays cuts smartphone maker valuation: British bank Barclays has cut the valuation of American tech giant and smartphone maker Apple on the back of cooling iPhone demand.

The company saw shares tumble as much as 3.6 per cent with over $100 billion in market value erased after the announcement.

Barclays also trimmed the stock’s price target by a dollar to $160 from the previous $161.

A Domino Effect on the industry?

Source: Pexels

The impact is a warning bell for the sector and component manufacturers, as shares of South Korea’s SK Hynix Inc and Samsung Electronics Co Ltd, memory chips and display manufacturers to Apple, sank between 2 to 3 per cent. Samsung SDI, which supplies Apple with batteries, shed 2.9 per cent.

“We expect reversion after a year when most quarters were missed and the stock outperformed,” the analysts wrote in a note on Tuesday. “Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling,” the note cited in reports read.

The American smartphone pioneer will face increased headwinds for Apple’s future device sales, the iPhone impacted specifically, as per the analyst note shared by Barclays.

Impact Closer Home

Source: Freepik

The scenario bodes poorly for Asian suppliers as a bulk of Apple’s supply chain for devices is geared heavily towards Asia. Notably, India has also started iPhone production but the market impact is not clear, even as IT stocks were in the red.

Hon Hai Precision Industry Co Ltd and TSMC, Taiwanese semiconductor suppliers to Apple, lost 0.5 per cent and 2 per cent during trade in their country.

In China, AAC Technologies Holdings Inc, which supplies acoustic components to Apple, fell 3.6 per cent while BYD sank 0.4 per cent in Hong Kong trade.