2017/12/26

Sluggish sales drag down iPhone-related shares

IPhone X has been in a downturn since its sales in the beginning. Because of the low sales in mainland China -- the world's largest smartphone market, technology giants have lowered their sales expectations for iPhone X.

The report said Apple would see iPhone X sales of 30 million units in the first quarter of next year, compared with the previous forecast of 50 million units, citing unidentified people in the supply chain.

Shares of Lens Technology Co., Ltd., which supplies glass covers to Apple, fell by 8.44 percent on Monday on the Shenzhen Stock Exchange, while Shenzhen-based Desay Corporation, which provides more than half of the battery products for Apple's iPhones, declined by 5.87 percent, closing at 38.3 yuan ($5.9) per share, the lowest in 11 months.

image credit: internet

Shares of Luxshare Precision Industry Co, which produces Apple's wireless headphone AirPods, dropped by 4.32 percent.

The report also said Apple's chief manufacturing partner Foxconn Technology Group, also known as Hon Hai Precision Industry Co, had stopped hiring new staff as of Monday at its factory in Zhengzhou, capital of Henan province.

Apple declined to comment on whether it had cut smartphone orders from upstream suppliers. Analysts estimated that orders to supply chain manufacturers in the first quarter of next year were likely to be lower than expected, which will affect the performance of most upstream supply chain players during the period.

"The reduction in orders happened because the Chinese mainland's smartphone market has become saturated and demand has been weaker than expected, especially in the first quarter of next year, which is an off season," said Roger Sheng, a senior analyst at research company Gartner Inc.

In addition, the cycle for consumers changing their handsets had been extended due to a lack of innovation in the function and design of these gadgets, Sheng explained.

"However, the smartphone shipments of local producers are still expected to increase in the first half of next year as they are ramping up efforts to expand their presence in overseas markets," Sheng added.

Media reports said that iPhone X orders will decline by 30 percent in the first quarter. Other smartphone manufacturers including Huawei Technologies Co., Ltd., OPPO Electronics Corp and Vivo Mobile Communication Technology have cut down their orders from supply chain manufacturers by about 10 percent.

According to market research firm IDC, Samsung Electronics Co., Ltd. remained the leader in the smartphone market83.3 million units were shipped in the third quarter, up by 9.5 percent year-on-year, with a 22.3 percent market share worldwide.

Apple's newest iPhones helped drive third-quarter shipments to 46.7 million units, up by 2.6 percent from last year. Its market share remained unchanged at 12.5 percent.

Huawei ranked third, taking up 10.5 percent, followed by OPPO and Xiaomi with a global market share of 8.2 percent and 7.4 percent respectively.

"Overall, the industry continues to grow, but at a much slower pace than in recent years," said Ryan Reith, program vice-president with IDC's worldwide quarterly mobile device trackers.


What leads to iPhone X’ downturn in the market? In a word, the saturation of China's mobile phone market and the lack of innovation in Apple's mobile phones have led to the decline in demand.

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