What happened

Shares of Cirrus Logic (CRUS 1.95%) were down about 11% at 11 a.m. EST. While there was no company-specific news affecting the audio chip developer, lowered guidance from a fellow Apple supplier and negative analyst notes regarding iPhone shipments weighed down the stock.

So what

Lumentum, a manufacturer of optical and photonic products, slashed its second-quarter guidance on Monday to reflect a request from one of its largest customers to reduce laser diode shipments. Apple is Lumentum's largest customer, accounting for 30% of annual sales, although the company didn't disclose the name of the company making the request. Lumentum now expects second-quarter revenue between $335 million and $355 million, down from a previous range of $405 million to $430 million.

A declining stock chart.

Image source: Getty Images.

On top of Lumentum's guidance cut, two analysts had some pessimistic things to say on Monday. Longbow Research sees iPhone order cuts of 20% to 30% based on its checks, mostly affecting the XR and XS Max models, while JPMorgan expects iPhone order cuts and margin headwinds. 

iPhone weakness is very bad news for Cirrus. Apple accounted for 81% of the company's sales in fiscal 2018.

Now what

Cirrus has been working to diversify for years, getting its chips into Android devices as well as nonphone products like headsets. But the company remains heavily dependent on the success of the iPhone. Cirrus suffered a 13.9% sales slump in its second quarter, and it expects another steep decline in the third quarter. The company is hoping to return to growth in fiscal 2020, but lingering iPhone weakness could make that difficult.