Apple’s iPhone suppliers just won’t stop reporting worrying results. This time it’s Taiwan’s Largan Precision, a maker of iPhone camera lenses, which revealed a year-on-year decline of more than 28% for its November revenues.
The news hit Largan’s share price by almost 10%, and it wasn’t the only casualty. Apple assembly contractors Pegatron and Foxconn took hits of 5.3% and 3.6% respectively, while Japanese components manufacturers TDK and Murata fell by 6.6% and 5.3% respectively. Samsung—an Apple rival but also a supplier of memory chips and screens for iPhones—fell by 2.3%.
Apple’s own shares fell almost 3% in pre-market trading, having already fallen 4.4% on Tuesday—President George H.W. Bush’s Wednesday funeral gave Wall Street a day off—thanks to a downgrade from HSBC.
The bank noted that Apple’s hardware sales seem to have flatlined, and revenues are instead being supported by the company charging higher prices for its gadgets. That may work for Apple, but it doesn’t help its suppliers much.
Largan’s bad news fed into a wider market rout that was in large part precipitated by the arrest in Canada of Huawei chief financial officer Sabrina Meng Wanzhou, who is also the daughter of company founder Ren Zhengfei.
Meng is likely to be extradited to the U.S. in relation to a probe over Huawei’s alleged Iranian sanctions-busting, and China’s angry reaction suggests the market-pleasing trade détente between the U.S. and China may be short-lived.
