Analysts say U.S. smartphone maker has tight grip on top end of market
Stocks of companies based in the Chinese mainland that are related to Apple Inc's businesses rose Monday despite declines in the domestic equity markets, ahead of the U.S. tech giant's new product launch scheduled for Wednesday.
Shenzhen-listed Lens Technology Co (LT), a cover plate supplier for Apple devices based in Changsha, Central China's Hunan Province, rose by 3.86 percent, closing at 57.9 yuan ($9.08) per share on Monday.
Other related domestic electronics component producers such as Shenzhen-based Han's Laser Technology Co Ltd and Sunwoda Electronics Co, an Apple battery supplier also based in Shenzhen, closed up 1.64 percent and 3.94 percent, respectively, on the Shenzhen Stock Exchange.
The tech-heavy Shenzhen Component Index closed down 0.63 percent to 9,991.76 points while the benchmark Shanghai Composite Index fell 2.52 percent to 3,080.42 points on Monday.
"Investors bought stocks related to Apple partly due to the buzz surrounding its new iPhones," Wang Yanhui, secretary-general of the Mobile China Alliance, told the Global Times on Monday.
Apple has issued invitations to a media event on Wednesday in San Francisco, widely expected to feature the launch of updated iPhones and potentially a new version of the Apple TV set-top box.
Apple-related stocks in the A-share market overall surged 7.37 percent on August 28 after Apple announced the date on which it would introduce new iPhones, domestic news portal stock.hexun.com reported Sunday.
The lowest increase of stocks related to Apple business reached over 4 percent on August 28, and LT's shares gained more than 8 percent on that day.
LT's first-half revenue was almost 8.66 billion yuan, up 55.64 percent year-on-year, according to the company's interim statements released on August 25.
Net profit stood at 685 million yuan, up 33.85 percent year-on-year.
Wang forecast that Apple sales would remain strong for the next two years as domestic brands cannot fully compete with Apple yet.
And sales of Samsung Electronics Co, Apple's biggest rival in the middle and high-end segments of the market in the Chinese mainland, have declined in recent years, he noted.
South Korea-based Samsung has 10.8 percent of China's smartphone market in terms of shipments, lagging behind Apple as well as Chinese smartphone upstarts Huawei Technologies Co and Xiaomi Inc, which have about 15.9 percent and 16.6 percent market shares, respectively, according to data from Guangzhou-based market consultancy iiMedia Research Group.
Although it faces intensified competition from domestic smartphone producers such as Huawei and Xiaomi, Apple won't feel much immediate impact as the company focuses on the high end of the market, which still has room to develop, said Wang Jun, an analyst at Beijing-based market research firm Analysys International.
"The largest challenge confronted by Apple in China is inside the company," he told the Global Times on Monday. "How to keep creating innovative products for customers is its top concern."
"The new iPhones will yield a sales boom for Apple for two to three months in the Chinese market, then sales will gradually decrease," he said.
According to data from U.S.-based market research company International Data Corp, Apple shipped 47.5 million units in the second quarter, which was a 22.3 percent decline from the first quarter.
Apple had revenue of $49.61 billion in the third fiscal quarter (ended on June 27), an increase of 32.5 percent year-on-year, according to the company's results. Net profit stood at $10.68 billion, up 37.8 percent.
