Following Apple’s admission earlier this week that Q1 2019 revenue will be lower than anticipated, we’re starting to hear from suppliers who have been affected by the slump. Bloomberg reports this morning that Largan, a supplier of camera lenses to AAPL, has suffered a significant drop in revenue during the holiday quarter…
For Largan Precision Co., sales fell 33.9 percent year-over-year to $104.9 million for the December quarter. Interestingly, however, Largan was predicting this plunge as its earnings were in line with expectations.
Largan, unlike some other suppliers, doesn’t rely solely on the iPhone for its revenue. Instead, it also provides camera lenses for Huawei and Samsung – two of Apple’s biggest competitors in China.
Bloomberg reports:
Jeff Pu, an analyst at GF Securities, explained that the effect of weak iPhone demand in China on Largan’s earnings was likely offset by stronger performance from other companies. “Largan’s December result and guidance for January show that while iPhone demand continues to be tepid, Chinese smartphone makers are not faring as bad as feared,” Pu said.
In his letter to investors, Tim Cook cited a weakening China economy as one of the biggest reasons for AAPL’s lower-than-expected revenue in Q1 2019. While that certainly could be the case for Apple’s higher-priced iPhones, Largan’s results seem to imply that not all smartphone manufacturers faced the same fate as Apple during the quarter.
