Wednesday, December 5, 2018

Apple's recent woes are bleeding into its global supply chain as stock selling accelerates - Business Insider

Apple's stock woes are bleeding into its global supply chain.

Shares of iPhone suppliers tumbled on Wednesday after Apple's stock tumbled 4.4% on Tuesday — outpacing a particularly brutal 3.8% drop in the Nasdaq. Apple stock was hurt in part Tuesday by a downgrade by HSBC, which cited an overwhelming dependence on a single product, the iPhone.

"What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products, is now facing the reality of market saturation," HSBC said.

Here's a round-up of the damage in Apple's suppliers in Asia:

  • Pegatron, in Taiwan, fell 1.7%
  • The Chinese acoustics technology supplier AAC Technologies lost 3.7%
  • Taiwan's Flexium Interconnect was down 3.9%
  • Taiwan's Largan Precision declined 3.7%

In the US, Lumentum Holdings, an optical products manufacturer, fell 5.5% in regular trading on Tuesday after it cut its outlook last month.

Cirrus Logic closed down 1.9% down — having fallen as much as 5.8% days after it cut its December revenue outlook because of recent weakness in the smartphone market. Apple accounts for about 82% of Cirrus' sales.

Read more: We're in the darkest hour of Apple's 'white-knuckle period,' and some investors are loving it

Similarly, Qorvo, a North Carolina semiconductor company, dropped 5.3% on Tuesday amid concerns about Apple, which recently lost its status as the world's most valuable business.

Another Apple supplier, Broadcom, which reports earnings on Thursday, fell 4.1%. The company, which designs semiconductors, is believed to make about $10 on each iPhone sold, according to JPMorgan, cited by CNBC.

Other manufacturers, such as Austria's AMS, which develops facial-recognition software, cut its revenue forecast last month as iPhone sales diminished.

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