Slow Apple sales could affect Taiwan's contract electronics output

Slow Apple sales could affect Taiwan's contract electronics output

Taipei, May 26 (CNA) The Market Intelligence and Consulting Institute (MIC) under the government-sponsored Institute for Information Industry said Thursday that slower sales of Apple Inc. devices could have an adverse impact on the output of Taiwan's contract electronics makers.

The MIC said that shipments of Apple for 2016 could fall about 3.9 percent from a year earlier, leading to weakness in Taiwan's contract electronics firms.

As a result, the production value of Taiwan's smartphone brands and contract makers, along with related device suppliers, is expected to stand at NT$2.16 trillion (US$66.26 billion) in 2016, down 5.4 percent from a year earlier, marking the first year for the particular sector to post a year-on-year fall in output.

Hsu Tzu-ming, an analyst with MIC, said that Apple's shipments have shown signs of slowing, and since the U.S.-based consumer electronics giant launched a budget model, the iPhone SE, with a starting price tag of only US$399 -- the new model is expected to drag down Taiwan's suppliers' production value.

Major high-tech firms, such as Hon Hai Precision Industry Co., an assembler of iPhones and iPads, and smartphone camera lens maker Largan Precision Co., are among the local suppliers to Apple. These Apple concept stocks account for more than 30 percent of the total market capitalization in Taiwan.

In addition, Hsu said, as Taiwan's smartphone brands have also been suffering a decline in flagship model shipments and some of them have delayed their plans to unveil new models, output of the country's smartphone industry is expected to shrink.

Faced with a slowdown in the developed smartphone markets around the world, the MIC said that Taiwanese suppliers have shifted their attention to emerging markets in Southeast Asia and other regions.

The MIC said that local smartphone makers have been gearing up to enter the virtual reality, wearable devices and wireless power charging arenas in a bid to provide value-added mobile communication products to consumers and reverse the current predicament.

According to the MIC, the production value of the global communications sector for 2016 is expected to fall 2.2 percent from a year earlier to US$489 billion, while the output of Taiwan's communications sector is expected to drop 2.7 percent to NT$3.17 trillion. (By Jalen Chung and Frances Huang)

Updated : 2021-02-26 03:23 GMT+08:00