A Lousy June for Apple’s Component Suppliers
Preliminary sales for all but one of a group of component suppliers that generate 50 percent to 60 percent of their revenue from Apple were down 13 percent month over month in June, says Topeka Capital Markets analyst Brian White. That’s well below the average uptick of 1 percent they’ve posted over the past seven years. Worse, sales among these suppliers were down 8 percent sequentially, far short of the 15 percent increase they’ve managed in the same quarter for the past five years.
What’s going on?
Hard to say, really. White speculates that the decline here is likely related to seasonal sluggishness ahead of Apple’s fall product launches, exacerbated by further weakness in non-Apple customers’ sales.
“We believe the combination of seasonal sluggishness during the month of June as new products are expected to launch in the coming months, combined with a reallocation within the supply chain as factors that drove the weak print,” White said in a note to clients. “Additionally, the weakness in tech given the slowing economic environment likely took its toll on non-Apple sales.”
Importantly, White is holding fast to his $1,111 price target for Apple shares, which remains one of the highest around. Still, a data point worth mulling before Apple next reports earnings, on Tuesday, July 24, 2012.
(Image courtesy of CporsDesigns/ DeviantArt)