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Phil Schiller, Apple's senior vice president of worldwide marketing, announces features of the new iPhone X at the Apple campus in Cupertino, California on Sept. 12, 2017.   © AP

New iPhone no big deal for Asian investors

Parts suppliers stung by competition from Samsung, Xiaomi as Apple loses its shine

TOKYO -- Apple may have wowed fans with its new iPhone X, but Asian investors in the company's suppliers are hardly impressed.

Stock prices of suppliers were mixed in the region, with market players worried that iPhones are losing their appeal in the face of rising competition from Android rivals like Samsung Electronics and Xiaomi.

The features of the new iPhones unveiled on Tuesday were not much different from those leaked online prior to the official announcement.

Tim Cook demonstrates an iPhone at the launch.   © Reuters

Apple stock began sliding when Tim Cook introduced the iPhone 8 at the newly built Apple Park in Palo Alto, California. The share price slid even further the moment he mentioned the 10-year anniversary model, iPhone X.

Supplier's stocks in Tokyo were mixed. Murata Manufacturing, which makes ceramic condensers for the smartphones, fell about 3% in the morning, while Sony, manufacturer of CCD image sensors for the phone's cameras, dropped nearly 1%. On the other hand, Nidec, which supplies vibration motors, rose 4%.

Other Asian markets had similar lukewarm reactions. In Taiwan, the world's largest contract iPhone manufacturer, Hon Hai Precision Industry, better known as Foxconn, traded in negative territory today. Lens maker Largan Precision was also down about 4%.

Meanwhile, Hong Kong listed AAC Technologies Holdings rose over 2%.

Selling the fact

According to Apple's top 200 supplier list released in February, over 50 suppliers are in Taiwan, the most of any region or country. Next comes the U.S., followed by Japan, China and South Korea.

The proportion of Asian providers has been rising since Apple made the list in public in 2013.

In the not too distant past, suppliers' stock prices mostly gained when new iPhones were released. But the situation has recently changed. On Sept. 10, 2014, the day following debut of the iPhone 6, Murata's share price rose 1.8%. From 2015 onward, however, rather than buying the rumor, investors have been selling the fact -- a sign that Apple has been losing its shine for three consecutive years. 

"Investors do not consider the iPhone as the dominant smartphone when there are Samsung Galaxies, Xiaomi Mi Mixes and other fine Android products in the market," said Tomoichiro Kubota, a market analyst at Matsui Securities.

It may also be difficult for Apple to meet demand for iPhone X. "OLED displays for iPhone X, provided by [Apple's] most competitive rival, Samsung, may become a bottleneck," Kubota explained.

Jeff Pu, analyst at Yuanta Investment Consulting in Taipei, said sell-through of iPhone 8 and iPhone 8 Plus is expected to be squeezed due to unfavorable pricing and limited upgrades. As Apple's share price stayed flat after the launch, Pu forecast that prices of so-called "iPhone-concept stocks" will remain "muted" in the near term, as some of them have seen their prices spike earlier in the year.

Contributing writer Jason Tan in Taipei contributed to this article.

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