Apple supplier Laird said it expected to post a sharply lower profit for the year, citing a slowdown in smartphone sales and “unprecedented” pricing pressure, sending its shares down by as much as 50%.
The selloff, marking the worst single-day drop for the stock, wiped out more than 420 million pounds from Laird’s market capitalization.
The profit warning raises doubts about a recovery in the company’s biggest business—the performance materials division, which makes parts for the iPhone and other smartphones.
Smartphone sales growth has been slowing since a historic jump in 2010 as people are changing mobile phones less frequently in most developed markets.
That has prompted smartphone makers to push for lower prices from suppliers—delivering a blow to suppliers’ margins.
Technology research firm Gartner said in a report in June that smartphone sales would grow only 7% in 2016, a rate that is half of that in the previous year.
Laird (LARRF), which makes chips used in Bluetooth devices, said on Wednesday that the improvement it had expected in its performance materials unit would be delayed.
Contracts with mobile device makers make up for about a third of the unit’s revenue. Analysts have speculated that Apple (AAPL) could have accounted for about 17% of the company’s total 2015 revenue.
Apple’s iPhone 7, which went on sale last month, received a subdued welcome. Overall iPhone sales fell 15% in the third quarter, the second consecutive quarterly fall for its flagship product.
Laird said it expected full-year underlying pretax profit to be about 50 million pounds ($61 million), well below the average analyst estimate of 75.5 million pounds, according to a company-compiled consensus.
The company also said revenue in the performance materials unit fell 5% on a constant currency basis in the third quarter ended Sept. 30.
Laird, which is on Apple’s official list of suppliers, had not previously given any guidance for the full year.
The company also said it would take measures to reduce costs and manage cash at its performance materials unit.
In August, Laird lost its top boss to British aerospace and defense company Cobham (CBHMY) and appointed CFO Tony Quinlan as chief executive on Sept. 5.