Apple (AAPL -2.6%) will likely miss its schedule for mass producing the lower-cost iPhones due to the coronavirus impact, according to Nikkei Asian Review sources.
Inventories of existing iPhone models could remain low through April or longer.
Mass production of the iPhone SE successor was supposed to start by the end of this month, but the start date could now be pushed back into March.
Apple wants to release the low-cost model this spring to build sales ahead of the fall iPhone launches.
Sources say iPhone suppliers in China are currently operating at 30-50% capacity on average.
Trump supports sale of U.S.-made jet engines to China
General Electric (GE -0.3%) shares drift up to roughly breakeven from early losses after Pres. Trump said this morning that he supports the export of U.S.-made jet engines to China, in an apparent response to a report that the administration was considering blocking a GE joint venture from selling them.
“We don’t want to make it impossible to do business with us,” Trump said in a series of tweets this morning. “That will only mean that orders will go to someplace else. As an example, I want China to buy our jet engines, the best in the World.”
The tweet suggested that Trump had come down on the side of GE in a debate within his administration, where some had hoped to halt the export of jet engines being manufactured for a new Chinese-made passenger jet.
Trump’s tweets did not explicitly mention a related White House debate about limiting Chinese access to chip-making technology, but the industry seems to believe the president’s overall message that he did not want to make it “impossible to do business with us” was a sign that he would oppose new restrictions on their China sales.
Intel could sell connectivity unit to MaxLinear – report
Intel (INTC -2%) is reportedly in talks to sell its connectivity business to MaxLinear (MXL -0.5%), according to Bloomberg sources:
No deal has been made, and Intel could still decide against a sale.
Last November, Bloomberg reported that Intel had hired a financial advisor for a potential sale of the unit, which makes chips for home internet equipment like routers and gateways.
Intel is working to sell off businesses in areas where the company isn’t competitive. Last year, INTC sold its smartphone modem business to Apple for $1B.
Post updated with more information.
Apple suppliers, semi stocks drop on warnings
Apple (NASDAQ:AAPL) supplier stocks are taking a pre-market hit thanks to the tech giant’s revenue warning due to the ongoing coronavirus outbreak.
The decliners include Broadcom (NASDAQ:AVGO) -1.1%, Qorvo (NASDAQ:QRVO) -1.9%, and Skyworks Solutions (NASDAQ:SWKS) -2.4%. Sales to Apple accounted for 20%, over 30%, and over 10% of their annual revenue in 2019, respectively.
Chip gear stocks are also seeing red after news that the Trump administration is considering new trade restrictions on China that would limit the use of American semi equipment.
Wedbush stays bullish despite Apple warning
Wedbush analyst Daniel Ives and Strecker Backe remain bullish on Apple’s (NASDAQ:AAPL) “5G supercycle thesis” despite the tech giant’s March quarter revenue warning.
Key quote: “While trying to gauge the impact of the iPhone miss and potential bounce back in the June quarter will be front and center for the Street, we remain bullish on Apple for the longer term 5G supercycle thesis despite today’s news.”
The firm sees the warning as more of a timing issue than an extended supply and demand issue for iPhones.
Wedbush maintains an Outperform rating and $400 target for Apple. The company has a Bullish average Sell Side rating.
Related: Last month, Apple said it was providing a wider revenue guidance range than usual to account for the coronavirus uncertainty.
