Apple hit with more bad news on iPhones as shares fall again

Matt Krantz | USA TODAY

Show Caption Hide Caption Apple fails yet again: $123B vanishes Apple shares dipped below $110 for the first time since October as analysts predict a decline in sales over the holiday season.

Apple's (AAPL) near-term future just got a little dimmer.

Evidence pointing to a "subdued iPhone cycle for the next few quarters" continues to mount, according to a Credit Suisse report issued to clients Tuesday. Shares of Apple are down another $2.01, or 1.8%, to $110.46 Tuesday as investors see weakening results for smartphone part suppliers as a harbinger for slowing smartphone growth. Some investors fear the runaway growth of the smartphone market is finally showing signs of slowing.

The result has been a vicious correction in shares of Apple. The stock is now down 17.8% from its 52-week high of $134.54 notched on April 28 - putting it just a hair above the 20% bear market threshold. Given the massive size of Apple, that decline means the stock has shredded $133 billion in shareholder wealth from the high. Apple shares are being left behind a massive tech-stock rally that's lifted shares of Amazon (AMZN), Google's parent Alphabet (GOOGL), Netflix (NFLX) and Microsoft (MSFT). Shares of Apple are down again Tuesday despite the Dow being up 157 points Tuesday to 17,525.

Dismal revenue guidance from Dialog Semiconductor, a key Apple smartphone supplier, on Tuesday reinforces growing concern that Apple's smartphone growth is cooling off and could be disappointing in the near term, Credit Suisse says. Specifically, Dialog took down revenue guidance for the quarter by 11% to a range of $390 million to $400 million, Credit Suisse says. That's potentially a harbinger of disappointing Apple smartphone demand as Dialog is a leading supplier of power management chips for the company.

Dialog's disclosure indicates Apple smartphone shipments could come in lower than 50 million units in March, Credit Suisse says. That misses the brokerage firm's 55 million unit shipment forecast for the quarter.

It's not just one supplier seeing disappointing consumer electronics demand. 3M (MMM), which makes optical film, connection devices and touch screens for TVs and smartphones, told investors Tuesday it's seeing consumer electronics demand come in below expectations, too. The chief financial officer of 3M, Nicholas Gangestad, told investors the company is "seeing weaker-than-expected demand in the consumer electronics markets, which is impacting our Electronics and Energy business," in a call with investors.

Despite signs of short-term weakness, Credit Suisse and most other brokerage firms, though, remains steadfastly bullish on Apple's stock long term. The company's marketing continues to successfully convince consumers they must still pay $650 for smartphones. Apple has recently launched a payment plan for its phones as many carriers back away from subsidies.

The average analyst still thinks Apple's stock will be worth $150 in 18 months, which if correct, would be nearly 35% upside.