2018-11-21 11:36:00 Wed ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Apple upstream suppliers from Foxconn and Pegatron to Radiance and Lumentum experience sharp share price declines during the Christmas 2017 holiday quarter. Foxconn, one of the major upstream suppliers for Apple iPhones and iPads, plans cutting costs at least $3 billion in 2019. In light of anemic demand for iPhones and iPads, Foxconn derives more than half of its revenue from Apple and now needs to reduce non-technical staff by at least 10%.
Foxconn faces a difficult and competitive year ahead.
As Goldman sets a lower share price target for Apple after the prior round of double cuts, this change triggers adverse ripple effects on the upstream assemblers from Foxconn to Pegatron. Foxconn assembles iPhones, tablets, laptop computers, and Sony PlayStations at factories in China, Taiwan, and America. As the smartphone market wanes and weakens in recent times, Sino-U.S. trade tensions exacerbate global economic policy uncertainty. Foxconn flagship technology conglomerates post net profits 12% below stock market analyst expectations as of late-November 2018. As the main facial recognition technology provider for Apple, Lumentum also experiences a 9% share price decline in recent times.
Other Apple upstream suppliers such as Pegatron and Radiance expect to receive more favorable net income results after the festive Christmas season.
Apple now diversifies its smartphone provision into 3 key product lines (i.e. iPhone XS, iPhone XS Max, and iPhone XR). The Apple value chain can reap the fruits of core business process improvements only when the average retail price increase outweighs the imminent decline in smartphone sale volume. Due to a relatively low price elasticity of demand for iPhones and iPads, the Apple value chain expects to rebound in share price performance in the next few months. In terms of technology transfer, most flagship smartphones from Apple and Samsung to Huawei, Oppo, and Vivo now employ organic light-emitting diode (OLED) curvy touch screens to ensure better resolution and facial recognition. In comparison, the more affordable iPhone XR and Xiaomi smartphones make productive use of liquid crystal display (LCD) flat touch screens for high resolution. As most of these flagship smartphones target early technology adopters and gadget lovers, more affordable smartphones attract mainstream users who are responsive to price and quality improvements. In equilibrium, this multi-market competition helps maintain mutual forbearance.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2017-12-14 12:41:00 Thursday ET
Federal Reserve raises the interest rate by 25 basis points to the target range of 1.25% to 1.5% as FOMC members revise up their GDP estimate from 2% to 2.5
2017-05-25 08:35:00 Thursday ET
Treasury Secretary Steve Mnuchin has released a 147-page report on financial deregulation under the Trump administration. This financial deregulation seeks
2018-03-27 07:33:00 Tuesday ET
CNBC's business anchorwoman Becky Quick interviews Nobel Laureate Joseph Stiglitz on the current trade war between America and China. As America imposes
2019-09-09 20:38:00 Monday ET
Harvard macrofinance professor Robert Barro sees no good reasons for the recent sudden reversal of U.S. monetary policy normalization. As Federal Reserve Ch
2019-03-27 11:28:00 Wednesday ET
OECD cuts the global economic growth forecast from 3.5% to 3.3% for the current fiscal year 2019-2020. The global economy suffers from economic protraction
2020-01-01 13:39:00 Wednesday ET
President Trump approves a phase one trade agreement with China. This approval averts the introduction of new tariffs on Chinese imports. In return, China s