Apple supplier hints at more bad news for iPhone

According to PhoneArena , Skyworks makes chips that allow smartphones to connect to wireless networks, so its fate is directly tied to smartphone sales. Apple is Skyworks' biggest customer, so the company is seen as a proxy for iPhone demand. By 2023, sales to Apple will account for 64% of Skyworks' total revenue, with 85% of that coming from iPhone sales. This makes the iPhone the most important product for Skyworks.

Skyworks' poor earnings signal bleak iPhone sales in Q1 2024

Skyworks reported revenue of $1.046 billion in the first quarter of 2024, down 8.7% year-over-year. The company said it saw “below-normal seasonal trends” and “lower-than-expected market demand” in the first quarter. The company said it intends to leverage its connectivity technology across edge devices, including IoT devices, automotive electrification, advanced safety systems, and AI infrastructure.

Skyworks also sounded bearish about the second quarter of 2024, projecting “continued deterioration in the mobile business.” Given Skyworks’ heavy reliance on Apple, the company’s disappointing performance could be seen as another sign of weakening demand for iPhones, even though Apple isn’t the company’s only customer.

Even as the smartphone market shows signs of recovery, iPhone sales were hit in the first quarter and are expected to decline further in China, one of the company's most important markets. Analysts are not optimistic about iPhone sales when the company reports earnings on May 2.

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