Having Apple Inc. (AAPL) as your largest client is no guarantee of share-price gains for suppliers and assemblers of iPhones and iPads.
The CHART OF THE DAY tracks shares of Apple and the six suppliers most-dependent on the Cupertino, California-based, company according to revenue proportionality compiled by Bloomberg. Apple shares gained 3.5 percent this year through Dec. 18, while Cirrus Logic Inc. (CRUS), Multi-Fineline Electronix Inc. (MFLX), Wintek Corp. (2384), TPK Holding Co. each plunged at least 30 percent. Taipei-based Hon Hai Precision Industry Co., once the sole-assembler of iPhones, fell 2.2 percent. Only Germany’s Dialog Semiconductor Plc (DLG)’s 11.4 percent rise beat Apple’s.
Apple’s sales growth has slowed the past two years amid stiffer competition from Samsung Electronics Co. and a maturing global smartphone market. Hon Hai, which gets almost half its revenue from Apple, isn’t expected to reach Chairman Terry Gou’s 2013 growth target of 15 percent, while TPK, also based in Taiwan, is poised to post a second-consecutive quarterly sales drop amid lower orders for touch-sensors.
“There’s weaker confidence in Apple’s long-term growth story,” said Vincent Chen, an analyst at Yuanta Financial Holding Co. in Taipei. “Apple often gives pricing pressure to suppliers, but now those suppliers aren’t getting the same benefit of strong sales growth that they had before.”
TPK’s share-price decline of more than 66 percent made it the second-worst performer in the MSCI Asia-Pacific Index behind Newcrest Mining Ltd. Apple accounted for 51 percent of TPK’s sales in the third quarter, up from 28 percent in the previous three months, as its main client released new devices, it said in an Oct. 31 investor conference call.
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