Apple's Taiwan Suppliers See Sales Falter Again on Slow Demand
Comment of the Day

June 21 2023

Commentary by Eoin Treacy

Apple's Taiwan Suppliers See Sales Falter Again on Slow Demand

This article from Bloomberg may be of interest to subscribers. Here is a section:

Revenue among Taiwan’s major Apple Inc. suppliers fell for a fourth straight month in May, as high
living costs keep a lid on consumer discretionary spending.

The group of device assemblers like Hon Hai Precision Industry Co. and components makers like Taiwan Semiconductor Manufacturing Co. reported overall sales of NT$944.10 billion ($30.5 billion) in May, 7.8% lower than a year ago and worse than April’s 2.1% drop, according to data compiled by Bloomberg.

Before announcing its long-awaited Vision Pro headset alongside upgraded Macs this month, Apple weathered a tough first quarter where sales of its hardware either slumped or stagnated. A small gain in iPhone revenue was greeted as a positive surprise by the market, which expected an even worse slump.

Eoin Treacy's view

Global rates have jumped higher over the last year and that is having an impact on consumer demand. Moreover, the global handset market is highly cyclical because most people do not change their model until the battery degrades. Mobile batteries have approximately 1000 charging cycles so that acts like a built in redundancy.

Legions of people bought new phones in 2020 and 2021 so a repurchase cycle should soon begin. The big challenge for most consumers is a new top of the line model costs over $1000. Apples headache is the next buying cycle could be for good enough older and cheaper models.
Apple continues to pause in the region of the all-time peak and just below the big psychological $3 trillion market cap mark.
Broadcom surged on new it will be an Apple supplier but is now very overbought and susceptible to mean reversion. 

Back to top

You need to be logged in to comment.

New members registration