September 1, 2015 at 12:17Demand for smartphones in China may fall due to falling stock market
For the first time in six years, the demand for smartphones in China has fallen by 4%. Yuanta analyst Jeff Pu believes that this is due not so much to a weakening economy as to a high level of penetration - ninety percent of the residents of large cities already have a smartphone. The collapse of the Chinese stock market may cause a further decrease in demand, it has already affected the capitalization of a number of smartphone manufacturers and component suppliers, Vedomosti writes .
In June 2015, the Chinese stock market peaked in the past seven years, then collapsed by 37%. The reason could be the report of the journalist Wang Xiaoluworking for China's online media business Caijing. Shares of the Chinese manufacturer of cases and supplier of integrated cameras for smartphones Q Technology fell by 60%. The trend has spread to suppliers of products from other countries - the capitalization of Taiwanese chip maker Novatek has decreased by a third.
About thirty percent of Apple's revenue comes from the world's largest market - China. Gartner analyst Jane Zhang believes that the company's business will suffer, but Tim Cook does not agree with this assessment: according to him, the company's sales grew in July and August despite the stock market decline. Nevertheless, the company's shares fell by 13% in three months.
Shares of Apple suppliers from Korea and Japan LG Display and Japan Display fell by 20%. Another Apple supplier, Murata Manufactoring, expects an increase in sales of components for smartphones manufactured in China by one and a half times in 2015, and calls the introduction of 4G in the country among favorable factors.
In August, the yuan sharply weakened. Apple will have to raise prices or put up with lower margins. The devaluation of Apple suppliers will be beneficial, as they sell products for dollars, and pay wages in RMB. For large manufacturers such as Huawei , a weakening currency will help strengthen its position in foreign markets. For companies that spend dollars on production and focus on domestic products, the trend is not profitable.
In June 2015, the Chinese stock market peaked in the past seven years, then collapsed by 37%. The reason could be the report of the journalist Wang Xiaoluworking for China's online media business Caijing. Shares of the Chinese manufacturer of cases and supplier of integrated cameras for smartphones Q Technology fell by 60%. The trend has spread to suppliers of products from other countries - the capitalization of Taiwanese chip maker Novatek has decreased by a third.
About thirty percent of Apple's revenue comes from the world's largest market - China. Gartner analyst Jane Zhang believes that the company's business will suffer, but Tim Cook does not agree with this assessment: according to him, the company's sales grew in July and August despite the stock market decline. Nevertheless, the company's shares fell by 13% in three months.
Shares of Apple suppliers from Korea and Japan LG Display and Japan Display fell by 20%. Another Apple supplier, Murata Manufactoring, expects an increase in sales of components for smartphones manufactured in China by one and a half times in 2015, and calls the introduction of 4G in the country among favorable factors.
In August, the yuan sharply weakened. Apple will have to raise prices or put up with lower margins. The devaluation of Apple suppliers will be beneficial, as they sell products for dollars, and pay wages in RMB. For large manufacturers such as Huawei , a weakening currency will help strengthen its position in foreign markets. For companies that spend dollars on production and focus on domestic products, the trend is not profitable.