- Shares in Alps Electric, TDK are closely correlated to Apple
- Samsung, Apple financial results show slowing phone demand
Alps Electric Co. led declines among smartphone component suppliers after Apple Inc. and Samsung Electronics Co. reported financial results that show slowing demand for the devices.
Alps, which makes actuators and switches, fell 17 percent, the most since March 2011. The company cut its annual profit forecast on weak smartphone demand from a major customer, it said in a statement Wednesday after the market closed.
Alps Electric’s stock has the highest correlation with Apple among more than two dozen Asia suppliers, Bloomberg News reported this week. The other Asian suppliers with strong correlations include TDK Corp., LG Display Co.. and Murata Manufacturing Co. Supplier reactions sometimes are delayed by a day, perhaps because Asian investors wait until they can see how Apple trades during U.S. hours.
Stocks in suppliers closed Thursday widely lower in Asia trading after Apple shares tumbled 6.6 percent Wednesday in the U.S. and Samsung Electronics reported earnings that missed estimates. TDK dropped 6.4 percent, LG Display fell 2.6 percent and Murata slid 6.6 percent.
Apple is facing slowing demand for its iPhone even as the company becomes increasingly dependent on the product for revenue. Researcher IDC predicted in December that 2016 smartphone growth will dip below 10 percent — the first time ever below that threshold. By 2019, shipments are projected to decelerate further, with sales seen rising just 4.7 percent in 2019. IPhone sales will also slow, according to IDC.