A lower-than-expected demand for the new iPhones and Apple's decision to offer more models has made it difficult to anticipate the number of components and handsets the company needs, according to the WSJ report https://www.wsj.com/articles/apple-suppliers-suffer-as-it-struggles-to-forecast-iphone-demand-1542618587.
Apple shocked investors a few weeks ago with a sales forecast for the Christmas quarter below Wall Street expectations, prompting certain suppliers to issue warnings that pointed to weakness in new iPhone sales.
Screen maker Japan Display Inc (Tokyo:6740.T - News) cut its full-year outlook citing weaker smartphone demand, while British chipmaker IQE Plc (LSE:IQE.L - News) said it expects a material reduction in its financial performance in the current year.
Forecasts have been particularly problematic for iPhone XR with Apple cutting its production plan by up to a third of the nearly 70 million units some suppliers had been asked to produce between September and February, WSJ reported.
As recently as last week, Apple informed several suppliers that it had lowered its production plan again for iPhone XR, the Journal said.
The company started selling its latest generation of phones, the iPhone XS and XS Max, in September and the XR model in October.
The brokerage forecast a 10 cent headwind to Micron and 15 cent headwind to Western Digital in the fourth quarter of 2018 and the first quarter of 2019 on lower iPhone builds.
Micron's shares were down 3.4 percent while Western Digital was down 1.7 percent.
Apple did not respond to a request for comment.
(Reporting by Kanishka Singh and Arjun Panchadar in Bengaluru; Editing by Gopakumar Warrier and Shounak Dasgupta)