Shares of Inventec Appliances Corp (
The stock was hit by reports that it has axed as much as 70 percent of its Guangzhou workforce in southeastern China on disappointing mobile phone sales during the Lunar New Year shopping spree.
But the company, which sells handsets under the OKWAP brand in the Greater China market, said it had only cut staff numbers by 20 percent,most of whom were sales people working on a short-term contract basis.
"It is normal to make these adjustments as we don't need so many sales personnel after the new year shopping season ends," said Michael Chen (陳烈宏), a spokesman for Inventec, in a statement filed to the Taiwan Stock Exchange.
Inventec markets its OKWAP brand in the Greater China market. But the manufacturing of iPod digital music players for Apple Computer is the company's main revenue earner.
"We have no plans to change our sales targets for the Chinese market," Chen stressed.
Inventec had aimed to sell 3 million of its own-brand GSM cellular phones in China and Taiwan this year, up from its 2 million-unit estimate for last year.
Investors, however, apparently did not buy the company's explanations. Inventec's stock price fell by 5.78 percent, nearly reaching the daily limit, to NT$138.5 yesterday on the Taiwan Stock Exchange.
That brought the stock's decline to almost 34 percent since early March amid swirling speculation that Apple Computer, Inventec's biggest client, would add Quanta Computer Inc (
Inventec used to be the sole supplier of iPods for Apple Computer.
Many foreign investment researchers, including Germany's Deutsche Bank AG, downgraded Inventec's target price in the wake of Apple Computer's decision to diversify the number of iPod suppliers.
A Deutsche Bank analyst told the Taipei Times that it had recently slashed its mid-February target price for Inventec by 24 percent from NT$223 to NT$169, but declined to reveal the reason.
The speculation about Inventec losing orders from Apple started to spread after Inventec's consolidated revenues in February this year halved to NT$6.87 billion from NT$13.44 billion in January.
"We have a good relationship with our client. We don't know whether the client is cooperating with other companies for supply," Chen said in the filing to the Taiwan Stock Exchange on Tuesday.
"It's not a shock for me as it is risky to count on one major client for growth," said Yen Ming-shan (