Apple Inc chief executive Steve Jobs’ resignation hit his company’s local component suppliers and its iPhone and iPad manufacturer, Hon Hai Precision Industry Co Ltd (鴻海精密), as uncertainty about Apple’s future sent their stocks tumbling at a steeper rate than on the broad market yesterday.
Hon Hai, known as Foxconn Technology Group (富士康科技集團) in China, passed on its good wishes to Jobs and said it believes Apple would continue to thrive in the future.
“We think Tim Cook has done good work as a stand-in CEO during Jobs’ absences and we expect Apple will perform well in the future,” Hon Hai said in an e-mail to Bloomberg. “The relationship between Cook and Foxconn has been very close and we expect that the relationship will become even closer in future.”
Shares in Hon Hai fell 4.63 percent to NT$61.8 compared with the benchmark TAIEX, which lost 1.23 percent. The stock price of Largan Precision Co (大立光), which supplies lenses for Apple’s iPhones, tumbled 5.04 percent to NT$735.
However, the Jobs bombshell helped boost the stock price of Apple’s Asian competitors. Shares in HTC Corp (宏達電) rose 1.35 percent in Taipei trading, while shares in South Korea’s Samsung Electronics Co jumped 2.4 percent in Seoul.
Apple announced on Wednesday that Jobs had offered his resignation and recommended that Cook, the chief operating officer, take over his post. Jobs was elected as Apple’s chairman of the board.
“While the day-to-day contributions of Jobs will be missed, we believe that the level of creativity and intelligence assembled throughout the management team and legion of Apple employees can sustain the Apple model and its industry leadership,” JPMorgan said in a report yesterday.
Local investors, though, were jittery at the news of the resignation.
Shares in Apple’s touch-panel suppliers Wintek Corp (勝華) and TPK Holding Co Ltd (宸鴻) plunged 6.89 percent and 1.79 percent to NT$22.3 and NT$658, respectively. Catcher Technology Co (可成科技), which makes metal casings for Apple’s MacBook Air, saw its share price sink 6.82 percent to NT$212.
Radiant Opto-Electronics Corp (瑞儀光電), which supplies backlight units for Apple’s tablet devices, saw shares edge 0.11 percent lower to NT$90.5.
However, Macquarie Research Ltd said the appointment of Cook could actually benefit Apple suppliers in Taiwan.
“Tim has, for years, been in charge of procurement and is very familiar with the Asian supply chain. In fact, when Apple tried to squeeze vendors over the last two years, component and assembly firms appealed to Tim directly to successfully argue their case,” Macquarie said in a research note.
As Apple products are selling to broader markets, Macquarie said “[Apple’s] operations will outweigh innovation and the supply chain will gain even more importance. We think sentiment selling in Taiwan’s supply chain will be short lived.”
In related news, Wintek yesterday said it returned to the black last month as factory utilization increased significantly.
Last month, Wintek made a net profit of NT$29 million (US$1 million) after losing NT$326 million in June, according to a filing with the Taiwan Stock Exchange at the request of the stock market regulator.
Wintek shares have plunged more than 33 percent since Wednesday last week.
The Taichung-based company lost NT$310 million in the second quarter.