Asian supplier shares tumble after Apple reports first drop in iPhone sales

Shares of Apple's suppliers in Asia fell on Wednesday after the iPhone maker reported its first-ever drop in iPhone sales since launching the smartphone in 2007.

Sales of iPhones, the heart of Apple's mobile age money making machine, were down 16 per cent, according to the latest earnings report. (AFP/Johannes Eisele)

In Taiwan, Hon Hai Precision, which assembles iPhones and is the world's biggest electronics components maker, and Taiwan Semiconductor Manufacturing Co (TSMC) fell as much as 0.5 and 0.95 per cent, respectively. Catcher Technology, a key metal casing supplier for Apple, was last seen with a loss of 1.69 per cent, after tumbling over 2 per cent to an intraday low of NT$225.00 at the start of trade.

Tokyo-listed components maker Murata Manufacturing plunged 4.13 per cent to hover near an intraday low of 14,735 yen, while Taiyo Yuden and Alps Electric recouped some losses to trade 1.68 and 2.13 per cent lower, respectively.

Apple said iPhone sales dropped year-over-year for the first time, slipping to 51.19 million in the recently ended quarter compared with 61.17 million in the same period a year ago.

With iPhones being the heart of Apple's money making machine, revenue fell on a year-to-year basis for the first time since 2003 to US$50.6 billion from US$58 billion a year earlier.

Profits fell as well, with Apple reporting net income of US$10.5 billion in the fiscal quarter to Mar 26 from US$13.6 billion last year.

Following the disappointing earnings figures, Apple shares tumbled more than eight per cent to US$95.72 in after-market trades.

Analysts said it was not surprising to see the drop in sales given the saturation of the global smartphone market.

According to a report by Gartner, global smartphone sales growth will likely slow to 7 per cent in 2016, marking its first-ever single-digit growth.

"The double-digit growth era for the global smartphone market has come to an end," said Ranjit Atwal, research director at Gartner. "Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case. China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7 per cent and 0.4 per cent growth, respectively."

Global smartphone sales logged their slowest growth rate since 2008 in the fourth quarter of 2015, up just 9.7 per cent on-year to 403 million units, data from Gartner showed. 

- CNA/sk