Apple's supplier hints at more bad news for the iPhone.

According to PhoneArena , Skyworks manufactures chips that enable smartphones to connect to wireless networks, so its fate is directly tied to smartphone sales. Apple is Skyworks' biggest customer, so the company is considered representative of iPhone demand. In 2023, sales to Apple accounted for 64% of Skyworks' total revenue, with 85% of that coming from iPhone sales. This makes the iPhone the most important product for Skyworks.

Skyworks' poor revenue signals sluggish iPhone sales in Q1 2024.

In the first quarter of 2024, Skyworks reported revenue of $1.046 billion, down 8.7% from the same period last year. The company stated that it observed "below-normal seasonal trends" and "lower-than-expected market demand" in the first quarter. The company expressed its intention to leverage its connectivity technology across edge-connected devices, including IoT devices, automotive electrification and advanced safety systems, as well as AI infrastructure.

Skyworks also appears pessimistic for Q2 2024, projecting "continuously declining mobile business." Because Skyworks relies heavily on Apple, the company's disappointing performance could be seen as another sign of weakening iPhone demand, even though Apple isn't the company's only customer.

Even as the smartphone market shows signs of recovery, iPhone sales were still impacted in the first quarter and are expected to decline further in China – one of the company's most important markets. Analysts are not overly optimistic about iPhone sales ahead of the company's earnings report on May 2nd.

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