AAPL drops in wake of broader tech selloff, claims of throttled 'iPhone 8'

Apple shares are down over $10 since Friday, reportedly part of a broader selloff of U.S. technology stocks, but also reflecting concerns over upcoming iPhones using slower cellular modems than their rivals.

Rumors that the "iPhone 8" and "iPhone 7s" won't offer gigabit downloads caused a dip in Apple shares on Friday, in turn leading the entire S&P 500 technology index to slip 2.7 percent, according to Reuters. While Apple shares managed $155 in early Friday trading, they fell later in the day and as of Monday morning were sitting at roughly $145.

Other affected technology stocks include Alphabet, Facebook, Netflix, and Microsoft, as well as Apple suppliers like Micron, Skyworks, and cellular chipmaker Qualcomm.

Bloomberg sources indicated on Friday that Intel won't have gigabit chips ready in time for this fall's iPhones, and that as a result, Apple will deliberately throttle units with Qualcomm modems. Apple has been doing similar throttling of the iPhone 7 to maintain a consistent experience across carriers.

Apple introduced Intel into its cellular supply chain last year, presumably for the sake of price competition and distancing itself from Qualcomm. The two companies are engaged in a legal war over royalties — Apple has accused Qualcomm of withholding money, abusing its market position, and pressuring chip buyers into signing patent licenses.

Phones with gigabit downloads are already on the market, including the Samsung Galaxy S8 and the HTC U11. In practice buyers are unlikely to see those speeds anytime soon, since they require ideal conditions and a nearby cellular tower supporting LTE Advanced.

33 Comments

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emig647 20 Years · 2446 comments

About 7 years ago

I really don't understand the modem issue. The infrastructure isn't even there yet. It doesn't make sense it would put pressure on Apple's stock, but then again I never understand how APPL is so volatile compared to others.

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schlack 11 Years · 733 comments

oh please...with my cell phone already capable of significantly faster throughput than my 75 mbps home broad band connection...gigabit throughput is way low down on my list of nice to have features...but you know...apple...doomed.

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gatorguy 13 Years · 24633 comments

AppleInsider said:

Phones with gigabit downloads are already on the market, including the Samsung Galaxy S8 and the HTC U11. In practice buyers are unlikely to see those speeds anytime soon, since they require ideal conditions and a nearby cellular tower supporting LTE Advanced.

Spotty in 2017, with Telstra Australia doing the best so far at rolling it out to real live consumers. But T-Mo claims that US mobile customers will see Gigabit LTE this year too, and all the other three big US telcos are well into real-world testing in cities like Houston, New Orleans, Ann Arbor, Atlanta and several others. Worldwide look for around 15 carriers to have it out of testing and in place this year according to what I've read, with another 47 in various stages of prep for next year. But in all reality most users just won't get a chance to experience better speeds this year either because their smartphone won't have the proper (enabled) hardware or in an area that won't yet be offering it. This should be much bigger and more common late 2017 and into 2018 with several capable phones from major manufacturers being sold and support from the networks they use.

With that out of the way I don't believe for a second that some rumor of modem speeds in a not-yet-announced iPhone model is behind the tech stock price dip. This correction was discussed and expected well before any of this was even reported. Heck, summer is coming and isn't this kinda traditional?
http://www.cnbc.com/2017/05/04/tech-stocks-correction.html

randominternetperson 8 Years · 3101 comments

There is no way that this silly modem rumor is why all the tech stocks dropped on Friday. It doesn't make any sense. Google's revenue, to pick just one example, is in no way tied to the success or failure of the next iPhone. Is the theory that people will decide to drop off the Internet if the next iPhone isn't as amazing as rumors have suggested and therefore Google will display fewer ads?

SpamSandwich 19 Years · 32917 comments

It's just s sector selloff. A panic. It has nothing to do with any alleged technical issues with the upcoming iPhone.