Apple’s supplier Cirrus Logic’s shares fell 12% after the company’s announcement that it would abandon the solid-state button design for its premium iPhone 15 series of smartphones. This news came as a surprise to investors, as there was speculation that Apple would use the button format that remains stationary. The change in design could have an adverse impact on suppliers’ revenues and profits. The decision is unfavorable to another supplier, Hong Kong-listed AAC Technologies Holdings, besides Cirrus Logic.
Design shift decision
According to TF International Securities analyst Ming-Chi Kuo, who is known for his accurate predictions related to Apple’s product launches, Apple has decided to abandon the design shift. Apple’s abrogation of the new solid-state button design is a blow to Cirrus Logic as its shares hit their lowest in over two months and possibly their worst day in about two years.
The iPhone 15 series
Kuo revealed in a blog post that the iPhone 15 Pro smartphones are in the Engineering Validation and Testing (EVT) stage. Apple has the room to modify its design, and the decision to abandon the solid-state buttons should have a limited impact on the mass production schedule and shipments for Pro models. This news comes after Wedbush Securities analyst Daniel Ives said that the iPhone demand has seen a clear uptick in Apple’s second quarter, particularly in China, with a strong March. This represents good news for investors.
Effects on suppliers
The new design shift decision will have an adverse impact on suppliers’ revenues and profits. Apple and AAC Technologies did not immediately respond to Reuters’ requests for comment. Cirrus Logic declined to respond. Investors had anticipated the new solid-state button design would increase suppliers’ revenues and profits, but Apple’s decision to abandon it means the opposite.
Conclusion
Cirrus Logic’s decision to abandon solid-state button design comes as a surprise to investors who were expecting revenues to rise due to this new innovation. However, Apple decided to abandon the design shift, which will have an adverse impact on suppliers’ revenues and profits. Despite this, Apple’s decision to abandon the design shift should have a limited impact on the mass production schedule and shipments for Pro models.
