Apple's Asia suppliers fall on report iPhone XR production boost cancelled (updated)

LG Innotek Co

06/11/2018 06:44

* Pegatron falls 5 pct, Foxconn down 3.6 pct
    * Taiwan's Flexium Interconnect, Largan Precision down as
well
    * AAC Tech, Samsung Electro-Mechanics, LG Innotek down
sharply

 (Adds analyst comment, background)
    Nov 6 (Reuters) - Apple Inc's  AAPL.O  Asian supplier and
assembler stocks fell on Tuesday on a media report that the
iPhone maker had told its smartphone assemblers to halt plans
for additional production lines dedicated to its new iPhone XR.
    Taiwan-based assembler Pegatron Corp  4938.TW  fell 5
percent and rival Hon Hai Precision Industry Co Ltd (Foxconn)
 2317.TW  dropped 3.6 percent. Apple is widely considered the
biggest customer for Foxconn.
    Apple shares fell nearly 4 percent on Monday after the
report by the Nikkei financial daily, which fuelled concerns
that the iPhone XR - the cheapest of three iPhones unveiled in
September - was facing weak demand just days after it went on
sale.
    The Nikkei, citing supply chain sources, said Apple had also
asked smaller iPhone assembler Wistron Corp  3231.TW  to stand
by for rush orders, but the firm would receive no planned orders
for the iPhone XR this season.
    Wistron shares were down 0.8 percent on Tuesday.
    "Foxconn's proportion of orders is bigger than Pegatron's
with a ratio of about 6 to 4. Wistron doesn't have as many
orders as the two, so the impact won't be so big there," said
Nicole Tu, analyst at Yuanta Investment Consulting in Taipei.
    Apple began shipping the iPhone XR on Oct 26 after two weeks
of pre orders. The company had released the higher priced iPhone
XS and XS Max more than a month earlier.
    On Apple's post-earnings call last week, Chief Executive Tim
Cook said he had very little sales data for the iPhone XR, but
the other two models had got off to a "really great start."
    Apple said sales for the usually busy holiday period would
likely miss analyst expectations as sales in emerging markets
including India were weak.  urn:newsml:reuters.com:*:nL2N1XC2E1
    Demand concerns have weighed on Apple's stock in the past
few sessions, pushing its market value below $1 trillion.
    On Tuesday, shares in other Taiwan-based Apple suppliers
fell sharply as well. 
    Flexium Interconnect Inc  6269.TW  and camera lens-maker
Largan Precision Co Ltd  3008.TW  were both down more than 6
percent. The Taiwan Weighted Index  .TWII  was down around 0.7
percent.
    Among other Apple suppliers in the region, Hong Kong-based
acoustic components maker AAC Technologies Holdings Inc
 2018.HK  fell over 6 percent.
    South Korean electronic parts suppliers Samsung
Electro-Mechanics Co Ltd  009150.KS  and LG Innotek Co Ltd
 011070.KS  were down more than 7 percent.
    Apple on Monday did not respond to a Reuters request for
comment. Foxconn, Pegatron and Wistron declined to comment.

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Apple warns on holiday sales, sending value below $1 trillion   
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 (Reporting by Sayantani Ghosh in Singapore and Jess Macy Wu in
Taiwan; Editing by Christopher Cushing and Darren Schuettler)
 ((sayantani.ghosh@thomsonreuters.com; +65 6870 3803; Reuters
Messaging: sayantani.ghosh.thomsonreuters.com@reuters.net))