Apple Supplier Skyworks Stock Plummets as iPhone Maker Turns to Competitor

Skyworks Solutions (SWKS) stock has taken a nosedive as Apple (AAPL) turns to a competitor for radio frequency (RF) components, signaling a potential shift in the tech giant's supply chain strategy. The news has sent shockwaves through the market, with investors grappling with the implications of this change for Skyworks' business and stock price.



The decision by Apple to dual-source RF components, specifically for the iPhone 17, has significant implications for Skyworks' financial projections and market position in the long term. The loss of business to Broadcom (AVGO) is expected to reduce demand for Skyworks' products by 20% to 25%, directly impacting the company's revenue and profitability. TD Cowen analyst Krish Sankar estimates that this move could have a $600 million impact on Skyworks' 2025 revenue, underscoring the magnitude of the loss.

The entry of Broadcom as a second source for Apple's components increases competition for Skyworks, posing long-term risks and emphasizing the company's dependence on Apple. Stifel analyst Ruben Roy downgraded Skyworks to a Hold rating, citing increased competition and dual-sourcing risks. The loss of business to Broadcom further weakens Skyworks' market position, potentially leading to a decline in its stock price and market capitalization.

To mitigate the risks associated with relying on a single major client like Apple, Skyworks can take several strategic moves to diversify its customer base. These include expanding into new markets and industries, strengthening relationships with existing customers, investing in research and development, diversifying its supply chain, and improving operational efficiency. By implementing these strategies, Skyworks can reduce its dependence on Apple and better navigate the dynamic and competitive tech landscape.

In conclusion, the loss of Apple's business to Broadcom has significant implications for Skyworks' financial projections and market position in the long term. To mitigate these risks, Skyworks must diversify its customer base and explore new opportunities to maintain its competitive edge in the tech industry. Investors should closely monitor Skyworks' stock performance and the broader market trends to make informed decisions about their portfolios.