Apple (NASDAQ:AAPL) supplier stocks are expected to take a massive hit this earnings season thanks to Cupertino's declining iPhone sales. Some of the most prominent Apple suppliers have already raised a white flag, warning investors well in advance that their December-quarter performance will not be as strong as they had originally anticipated.

Qorvo (NASDAQ:QRVO) was one of the first Apple suppliers to issue a warning in mid-November, making it clear that weak demand for flagship smartphones will affect its fiscal third-quarter performance. That wasn't surprising, as Apple supplied more than a third of the chipmaker's revenue last fiscal year. But there's a chance of Qorvo surprising investors with a sunny forecast when it releases its official fiscal third-quarter results on Feb. 7. Here's why.

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Looking beyond the expectations

Qorvo expects third-quarter earnings of $1.70 per share on revenue between $800 million and $840 million. The company was originally looking for $1.95 in earnings on revenue between $880 million and $900 million when it released its fiscal second-quarter results on Oct. 31 but had to quickly scale those expectations down to account for Apple's troubles.

At the mid-point of Qorvo's current expectations, its sales will drop around 3% year over year, and earnings will increase by a penny as compared to the prior-year period. That's not a big drop given Qorvo's substantial reliance on Apple's iPhones. In fact, Apple's iPhone revenue was down nearly 15% year over year during the December quarter because of weak demand from China, so it wouldn't have been surprising to see Qorvo taking a bigger hit.

However, the fact that Qorvo has been aggressively looking to diversify its revenue stream will help it mitigate the Apple-driven weakness to some extent. The chipmaker's infrastructure and defense products (IDP) business was up 15% annually during the last reported quarter and produced nearly a fourth of the total revenue.

According to Qorvo's latest update, the IDP business is "tracking within the range of its prior expectations," which makes it clear that the smartphone industry's weakness is having no impact on this segment. That's because Qorvo's IDP business houses growth-oriented verticals such as automotive connectivity, wearables, and connectivity solutions for 5G infrastructure.

All these markets hold massive long-term potential, and more importantly, Qorvo is in a nice position to cash in. It is a leader in gallium nitride (GaN), which will play an important role in the expansion of 5G network infrastructure. It is also engaging with "multiple automotive OEMs in worldwide field trials," which could open up another big opportunity given the pace of growth of the automotive chip market.

These opportunities are probably the reason why Qorvo doesn't expect a major sequential drop in its revenue during the January-to-March period (its fourth quarter of fiscal 2019). In the company's mid-November update on its fiscal third-quarter outlook, management forecast its fiscal fourth-quarter revenue to decline less than 10% sequentially, putting its revenue for the period at an estimated $738 million.

Notably, $738 million in revenue for the March quarter implies an 11% increase over the prior-year period's top line, which would be a solid achievement on the company's part given that supply chain reports indicate Apple's iPhone unit sales could dreap nearly 20% year over year over the same timeframe.

Another potential catalyst

Apple seems to have finally realized that it needs to do something to boost sales in the wake of stiff competition from the likes of Huawei. Cupertino's rivals have been launching capable flagship phones at lower prices, stealing the former's thunder in the process.

That's probably why Tim Cook has now decided to cut iPhone prices in the international markets, where the devices have become pricier thanks to a strong U.S. dollar. This would be only the second time that Apple cut iPhone prices since the device debuted in 2007, and such a move could boost sales in key markets such as China and India, where premium pricing is hurting the company's market share and shipments.

That would be great news for Qorvo's mobile business, which still supplies three-fourths of the company's total revenue, and would potentially allow the company to surprise investors with an upbeat outlook.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.