Fears of peak iPhone rattle Asian Apple suppliers

Apple earlier told smartphone assemblers to halt plans for additional production lines dedicated to its new lower-priced iPhone XR. (Reuters)
Updated 13 November 2018

Fears of peak iPhone rattle Asian Apple suppliers

  • Following a poor forecast earlier this month, analysts and investors voiced concern over the state of Apple’s business
  • Apple warned earlier this month that holiday sales would miss Wall Street expectations

TAIPEI/SEOUL: Shares in Asian suppliers and assemblers for Apple Inc. fell on Tuesday after several component makers warned of weaker than expected results, leading some market watchers to call the peak for iPhones in several key markets.
Following a poor forecast earlier this month, analysts and investors voiced concern over the state of Apple’s business, contributing to growing worries that iPhone sales were stagnating and could hurt suppliers.
Fresh warnings on Monday from screen maker Japan Display Inc, British chipmaker IQE Plc and Lumentum Holdings Inc, the main supplier of the Face ID technology in the latest generation of iPhones, hurt technology stocks in Asia on Tuesday.
Taiwan-based assembler Hon Hai Precision Industry Co. Ltd. (Foxconn) dropped more than 3 percent. Rival Pegatron Corp. fell more than 5 percent but later recouped losses. Both companies count Apple as a major customer.
The world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co, fell 2.6 percent, while Flexium Interconnect Inc. was down 1.5 percent. The Taiwan Weighted Index was down around 1.6 percent.
“Apple’s iPhone weakness has been a long-term issue for the Asia supply chain,” said Arthur Liao, an analyst at Fubon Research in Taipei.
“For Apple, the iPhone shipment has reached its peak. For tech suppliers facing the future, they have no other big client like Apple.”
The Cupertino, California-based tech giant’s shares fell to their lowest level in more than three months on Monday.
Last week a media report saying the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new lower-priced iPhone XR had pressured supplier stocks.
Analysts said the lack of technological breakthroughs had put a cap on demand, which would persist in the coming quarters.
“With no new technology in sight next year for the supply chain, this is not ideal for the companies involved,” said Nicole Tu, a Taipei-based analyst at Yuanta Investment Consulting.
“Up through the first half of 2019 we likely won’t see any breakthrough.”
Lumentum on Monday slashed its profit and revenue forecast for the current quarter, while IQE warned that current-year results would be lower. Japan Display lowered both sales and margin outlook for the year as well.
Apple warned earlier this month that holiday sales would miss Wall Street expectations due to weakness in emerging markets including India and foreign-exchange costs.
Among other Apple suppliers in Asia, Hong Kong-based acoustic components maker AAC Technologies Holdings Inc. slumped more than 6 percent.
South Korean electronic parts suppliers Samsung Electro-Mechanics Co. Ltd, Apple’s supplier of multi-layer ceramic capacitors, dropped more than 5 percent, while LG Innotek Co. Ltd. plunged 9.5 percent.
Apple said earlier this month it would stop giving the number of iPhones, iPads and Mac computers it sold in a quarter, a closely watched metric and a key indicator of the company’s success.
The move led analysts to question the company’s business and its share price has since dropped 12.6 percent.
“(This) indicates that the company itself is not confident about its performance at the moment,” said Park Jung-hoon, a fund manager at HDC Asset Management, which owns Samsung Electronics shares.
“Although Apple has positioned itself as a super-expensive handset maker providing high-end products, its strategy has not been working in emerging markets including China and India as Chinese vendors have been making iPhone-like products,” he said.


Getting more women into leadership positions top priority: CEO

This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia. (AP)
Updated 18 January 2020

Getting more women into leadership positions top priority: CEO

  • Saudi Arabia is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic

RIYADH: The boss of one of Saudi Arabia’s biggest banks says that getting more women into leadership positions is a top priority.
Samba CEO Rania Nashar chairs the action council for Women in Business created by the Business Twenty (B20), which is the official G20 dialogue with the business community. It represents the global business community across all G20 member states and all economic sectors.
She said the council was set up to boost women’s particpation not only in business but also in global leadership positions.
During the launch of the B20 in Saudi Arabia this week, Nashar highlighted the under-representation of women in the economy.
“There is a gap of 27 percent between male and female workers; 75 percent of males are part of the labor force while only 48 percent of females are working,” she said.
She said it was important not to just talk about women as workers but as business owners.

FASTFACT

Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020.

“That’s why entrepreneurship is very fundamental to our task force,” she said.  “The majority of the finance development programs have incentives for giving loans to females; however, despite the fact that many large borrowers are females, the amount of loans granted to them is far below what is granted to males,” she added.
Nashar said that two-thirds of female business founders feel that they were not taken seriously by investors when they pitch for investments. They also feel that they are treated differently from their male counterparts.
Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020. The Kingdom is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic.