TOKYO, Sept 11 Shares of Apple Inc's
component suppliers in Japan fell on Wednesday on concerns that
its lower-cost iPhone is still too expensive for its target
audience in emerging markets and could crimp their margins.
"In terms of components, it's all a volume game with low
margins. It's not a huge positive for component makers," a
senior dealer at a foreign bank in Tokyo said.
Among the Japanese component makers, Taiyo Yuden Co Ltd
, Murata Manufacturing Co Ltd and Ibiden Co Ltd
were down between 1.4 and 2.9 percent.
Other part suppliers including Mitsumi Electric Co Ltd
, Japan Aviation Electronics Industry Ltd,
Minebea Co Ltd and Nidec Corp, were off
between 1.6 and 3.3 percent.
Another trader disagreed that margins were under threat,
saying Apple has long been squeezing its part suppliers so if
the tech giant can increase sales, it would benefit component
makers as well.
"It's not negative for the component makers because it's
about volume. If anything, it is positive for component makers
because you are now arguably going to be selling even more
iPhones," he said, adding that the selloff in the Japanese
component makers offered buying opportunities.
"The potential you've got here is not that you are going to
be selling fewer iPhone 5s...What you are doing here is
attacking a brand new market," the trader said. "Now they have
come up with a mid-range phone because there is a huge market
for entry level smartphones."
On Tuesday, Apple unveiled its iPhone 5s with a fingerprint
scanner to help it stand out among the smartest of phones. It
also introduced a cheaper, colourful plastic model for emerging
markets that proved pricer than expected.
The entry-level "iPhone 5C" starts in the United States at
$99 with a contract, or $549 without. Apple has been losing
ground to Samsung Electronics Co Ltd and Huawei
Technologies Co Ltd in emerging markets, such as China
According to Thomson Reuters StarMine, suppliers Taiyo
Yuden, Murata and Ibiden were 13 to 36 percent below their
intrinsic value, which evaluates a stock based on projected
growth over the next decade, using a combination of analyst
forecasts and industry growth expectations.