Apple Inc. (NASDAQ:AAPL) shares fell Friday after a Nikkei Asia report said the company cut component orders for its iPhone 18 Pro and iPhone 18 Pro Max by at least 15%.
The report cited “weaker than expected demand.” Bespoke Investment Group says the market has heard this kind of story before.
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A Familiar Fall Script
Bespoke labeled the drop “Here We Go Again.” The firm said reports out of Asia of production cuts for the newest iPhones now show up almost every year, shortly after launch.
“Death and taxes are the only things certain in life, but it’s becoming routine for ‘reports’ out of Asia of production cuts for the newest iPhone models shortly after their launch each year,” Bespoke wrote in a note to clients Friday.
The pattern is usually the same, the firm said. The shares drop for a short time. But “all you need to do is look at a long-term chart to show that they have had virtually no long-term impact.”
The Long View
The stock’s long-term chart supports that point. Apple closed at $141.50 at the end of September 2021, the month the iPhone 13 came out. At about $336 on Friday, the stock is up roughly 137% since then.
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Why This Year Could Be Different
This year, the cuts come with a cost problem attached. The iPhone 18 Pro and Pro Max launched in September at $1,199 and $1,299, $100 more than the models they replaced. Memory costs driven by AI are a big reason.
TrendForce estimates the cost of memory in the 256GB iPhone 18 Pro has jumped nearly 400% from a year ago. Memory now makes up 34% of the phone’s component costs, up from 10%. Chipmakers are putting server memory for AI data centers first because it pays better.
Early signs were mixed. Counterpoint said iPhone 18 Pro sales in China rose 12% from a year earlier in the first three days. But UBS flagged shrinking delivery wait times in more than 30 markets.
“Declining wait times against a stable supply backdrop is an increasing concern in our view,” the UBS analysts wrote, according to Nikkei.
Orders Aren’t Sales
The reported cuts are to component orders, not to sales. Nikkei also said Apple’s staggered launch may explain some of the weakness, since the standard iPhone 18 does not arrive until early 2027.
IDC still expects Apple to hold up far better than its rivals. It forecasts iOS shipments will fall just 1.3% this year. It sees global smartphone shipments dropping 16.7% and Android shipments falling 24.3%.
AAPL Stock Price Activity: Apple shares were down 1.11% at $336.64 during regular trading Friday and are trading lower by 0.15% at $336.13 in after-hours trading, according to Benzinga Pro data.
The stock is trading near its 52-week high of $345.34. Over the past 12 months, the stock has gained 32.3%, outpacing the S&P 500’s 16.0% gain.
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