Apple's dimming luster roils suppliers, investors

Sun Apr 21, 2013 8:55am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Reiji Murai and Clare Jim

TOKYO/TAIPEI (Reuters) - Apple Inc marketing chief Phil Schiller let slip during last August's courtroom battle with Samsung that when setting forecasts for new iPhones, the inside joke was that people should assume sales would equal all previous versions combined.

That quip, uttered in front of Samsung Electronics Co Ltd's trial lawyers and the media, no longer rings true as Apple appears to be losing a once vice-like grip on its supply chain and Wall Street.

Suppliers and investors are struggling to gauge demand for the iconic smartphone as Samsung and up-and-coming rivals grab market share. Indications of reduced shipments now send shares in Apple and its component-makers into a tailspin. And criticism that innovation has stalled after the death of its legendary co-founder Steve Jobs 18 months ago is hurting sentiment in a stock that closed the week below $400 for the first time since December 2011.

Sources at several Asian suppliers, which for years basked in the glow of Apple's success and enjoyed stock gains even on rumors they might be among the select group of companies to sell components to Apple, told Reuters this week about ever-moving deadlines and said they were trying to reduce their reliance on the company.

An Apple supply chain source in Japan said those in the industry often jokingly refer to the company as "Poison Apple" because of its hard-to-meet high standards and low price expectations.

"'Apple can do no wrong' can only work until Apple does wrong," said Roger Kay, president of researcher and consultancy Endpoint Technologies Associates. "It's like the rubber band effect. The more you stretch it, the more snap you get coming back."

Apple reports quarterly results on Tuesday and declined to comment for this story. It has consistently said it focuses on making the best products - its iPhones remain the industry gold standard - and avoids discussing product strategy.

CEO Tim Cook stressed on the last quarterly earnings conference call that it's difficult to paint a complete picture of its production process from "a few data points".   Continued...

 
An employee cleans an advertisement plate at an Apple dealership on the eve of iPhone 5's release, in Wuhan, Hubei province December 13, 2012. REUTERS/Stringer