Apple Cut iPhone 18 Orders; What Does It Mean For Suppliers?

Key Points

• Apple reportedly reduced October component orders for its iPhone 18 Pro models by 15% to 20%, raising questions about demand and potential supplier exposure.
• Skyworks faces greater customer concentration risk, although its recently completed merger with Qorvo provides opportunities to diversify.
• Broadcom's $30 billion-plus Apple agreement remains significant, but its broader semiconductor and AI businesses could limit the impact of weaker iPhone demand.

Shares of Apple Inc. NASDAQ: AAPL dipped on Oct. 9 after rumors swirled that the tech giant had trimmed production on components for its new iPhone 18 Pro phones due to slow demand. While the stock has since recovered and remains up about 27% year to date (YTD), the suggestion that iPhone demand could be down has far-reaching ramifications not only for Apple but also for a group of other companies in the supply chain that make its phones possible.

Companies providing Apple with precision components can often lean on significant volumes, attractive margins, and prominent visibility in the tech space. On the other hand, a reduction in orders can be all the more devastating. Two companies making radio frequency semiconductors that make it possible for iPhones to connect to cellular networks rely on Apple as their largest customer. Still, the firms below may respond to the current climate in different ways, presenting multiple paths for investors.

What the Order Cut Actually Means

If rumors are true and Apple has trimmed iPhone component orders by 15% to 20% for the month of October, it's important for investors not to exaggerate this decision. Apple may be moving to manage the inventory of its iPhone Pro models more tightly than it has in the past, but it's not a sign that demand has completely collapsed. This is also understandable, given that iPhone 18 Pro products sell for about $100 more than the analogous products in the iPhone 17 Pro line due to inflation and tariffs.

Importantly, Apple has evidently not yet reduced orders for components for the standard iPhone 18, which is expected to launch in spring 2027.

Skyworks' Reliance on Apple Orders May Put It in Jeopardy

Skyworks Solutions Inc. NASDAQ: SWKS is one of the suppliers of Apple components most reliant on the larger company—Apple accounted for 67% of Skyworks' fiscal 2025 revenue before its merger with Qorvo. At this level of concentration, even a small shift in Apple's component orders can have a material impact on Skyworks' performance.

Investors may look for a measurable headwind to Skyworks' upcoming quarterly revenue due to Apple's reported October parts reduction. At the same time, Skyworks has seen gross margin pressure, increasing the importance of controlling costs. The company has already been working to cut costs to help protect profitability. Recently, however, sales have been somewhat sluggish, with revenue declining by 3% year over year (YOY) last quarter, though that still constituted a win compared to analyst expectations.

Though shares of SWKS are up about 17% YTD, the company has underperformed many other names in the semiconductor space, a reflection of how investors may perceive its risk. At the same time, SWKS also offers one of the more compelling value prospects across the semiconductor industry, with a forward price-to-earnings (P/E) ratio of about 21.

The questions for investors may be how much SWKS stock will dip to account for an Apple production cut, if one affects Skyworks, and when that decline may happen. Some portion of it has already happened, as shares are down about 7% in the five-day period surrounding the report.

One crucial advantage that Skyworks has heading into the end of the year is that it recently completed the acquisition of Qorvo, another radio frequency chipmaker that has also relied heavily on Apple orders. However, Qorvo's portfolio also includes a substantial—and growing—business serving government, defense, and aerospace customers. This may help Skyworks guard against some of the impact of a reduced Apple order, particularly if demand for defense electronics remains strong through the end of the year.

Broadcom's Relationship With Apple Is Very Different

A completely different company that is also in Apple's supply chain, Broadcom Inc. NASDAQ: AVGO, was the beneficiary of a deal worth more than $30 billion with Apple earlier in the year to produce more than 15 billion chips. For a roughly $1.7-trillion company like Broadcom, a partnership with Apple like this one is highly beneficial but not necessarily as vital as it is for a smaller company like Skyworks.

Broadcom's massive growth—86% YOY revenue growth last quarter on a solid earnings beat—is unlikely to see as much of a negative effect from an order cut as the one reported on for Apple, particularly given its expanding AI semiconductor business. Perhaps more important for investors, however, are the potential broader takeaways that a cut like this might suggest: consumers generally becoming more reluctant to buy pricey tech goods, for instance, or a broader need to balance price increases for these offerings with production needs. Regardless, Broadcom maintains a healthy Moderate Buy consensus rating among Wall Street analysts, and it could be positioned for big returns, with analysts calling for nearly 53% upside.