The Asian suppliers of Apple Inc, such as Taiwan's TSMC and Hon Hai Precision Industry, experienced a significant drop in their stock prices amidst concerns over the decline in iPhone sales. The market reacted negatively, with TSMC and Hon Hai Precision Industry recording a 1.5% and 1.9% decrease in their stock prices, respectively. Similarly, AAC Technologies in Hong Kong, a supplier of audio equipment to Apple, saw a decline of up to 2.2%.
While Apple's Asian suppliers faced a downturn, South Korea's Samsung Electronics Co Ltd and LG Innotek Co Ltd witnessed an increase in their stock prices. Samsung, a major rival of Apple, saw its stock rise by 1%, reflecting its diversified portfolio in display and storage technology. LG Innotek, another South Korean supplier to Apple, also experienced a 1.4% increase in its stock value.
Apple is set to announce its March-quarter earnings, with analysts predicting a substantial revenue decline. The tech giant is expected to report earnings per share of $1.5, unchanged from the previous year, on a revenue of $90.32 billion. This forecast indicates a significant drop from the $94.8 billion revenue reported in the previous year. The decline is primarily attributed to softening demand for iPhones in key markets like China, coupled with increasing competition from local players like Xiaomi and Huawei.
Artificial Intelligence Integration
To counter the decline in iPhone sales, Apple is reportedly exploring artificial intelligence features to enhance its products. The company is in talks with OpenAI and Google to incorporate generative AI capabilities into the iPhone. While these features are expected to be unveiled at the annual developer conference in June, investors are eager to learn more about Apple's AI strategy during the upcoming announcement.
Apple's shares fell by 0.6% on Wednesday, contributing to an overall decline of nearly 9% in the year 2024. This downward trend in stock prices led to Apple losing its position as the world's most valuable listed company to MSFT. The market volatility and uncertainty surrounding Apple's financial performance underscore the challenges faced by the tech giant in maintaining its competitive edge in the global electronics market.
The declining iPhone sales have not only impacted Apple's financial outlook but also reverberated across its Asian suppliers and the broader market. The company's strategic focus on artificial intelligence and technology innovation will be crucial in navigating the challenges posed by changing consumer preferences and market dynamics. Investors will closely monitor Apple's upcoming earnings report and product announcements for insights into its future growth trajectory.