Apple’s Asian Suppliers Slip as Market Awaits iPhone 12 Boost

Shares of Apple Inc.’s Asian suppliers dipped after the global tech titan reported iPhone sales that missed analyst estimates and said revenue in China slumped.

Apple shares dropped 4% in after-hours trading after the company reported that sales of the iPhone fell 21% in the September-ended quarter on anticipation of the newest models, which arrived later than usual this year. Chief Executive Officer Tim Cook said the response to the new iPhone 12 line, which was launched earlier this month, has been “tremendously positive.”

Among Asian suppliers, Lens Technology Co. dropped as much as 6.2% in Shenzhen, while Alps Alpine Co. slumped 5% in Tokyo, Flexium Interconnect Inc. slid 4.1% in Taiwan and ASM Pacific Technology Ltd. fell 3.6% in Hong Kong.

Still it wasn’t quite the bloodbath that past reactions in the Asia supply chain would have led investors to expect. Some key names including Murata Manufacturing Co., Taiyo Yuden Co. and LG Innotek Co. only fell by about 2% or 3%.

“People, at least in this part of the world, are expecting the iPhone 12, and particularly 5G handset sales, to get a boost in this holiday quarter, which is why supplier shares haven’t moved much,” said Jingyi Pan, a strategist at IG Asie Pte.

Apple’s sales in the Greater China region in the latest quarter fell 29% to $7.9 billion, the lowest since 2014. Still, the company is confident of growth in the region between October and December, with the large-screen iPhone 12 Pro Max expected to do “incredibly well,” Luca Maestri, Apple’s chief financial officer, said in an interview with Bloomberg Television.

Although the iPhone 12 has gotten off to a strong start, demand could begin to taper, spelling bad news for companies that count on the smartphone for their business, according to Amir Anvarzadeh, a strategist at Asymmetric Advisors in Singapore.

“We think that by December we might see Apple pushing out orders -- if we are right about sales proving far less impressive than almost all analysts have been hoping for,” he said. “If so the suppliers will tank.”

©2020 Bloomberg L.P.

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