Apple's suppliers are seeing low sales ahead of production of the iPhone 8

Apple’s suppliers have reportedly experienced lower than normal sales, which signals that Apple’s rumoured iPhone 8 may be in short supply.

A note published by analysts at Longbow Research on May 10 examines the sales of Apple’s Taiwanese suppliers. Its estimates show that suppliers’ sales increased 5.2% year-on-year, but they were down 9.3% sequentially. Longbow Research analysts note that 27 out of 35 of Apple’s suppliers “reported worse than seasonal sales.”

Longbow Apple supplier salesLongbowA chart from Longbow’s analyst note.

The drop in supplier sales doesn’t mean that Apple isn’t selling a lot of iPhones right now. Instead, it suggests that Apple isn’t ordering parts for its upcoming iPhones in the same volume as previous years. And down the line, that suggests there won’t be that many iPhones available for sale when they launch.

The idea that the iPhone 8 may be in short supply is nothing new. Reliable analyst Ming-Chi Kuo, who also covers Apple suppliers, said last month that “severe supply shortages may persist for a while after the new models are launched, capping total shipments of new iPhones in 2H17.”

Apple has a close relationship with its suppliers which can mean that a supplier’s value and revenue is largely based on its orders from Apple. That’s all well and good if Apple’s orders keep coming, but it can spell disaster if Apple decides to stop using your company. Chipmaker Imagination Technologies’ stock fell 70% last month after Apple announced it would no longer use the company.

NOW WATCH: LinkedIn’s gorgeous San Francisco offices are unlike anything we’ve ever seen

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In

apple iphone 8 sai-us uk