Australia’s Macquarie Securities has downgraded its stock rating for Hon Hai Precision Industry Co (鴻海精密) to “neutral” from “outperform,” citing weaker-than-expected demand for Apple Inc’s newest version of the iPhone.
The brokerage also lowered its target price on Hon Hai stock to NT$90 from NT$120, amid growing concern over the poor demand for the iPhone 5 expected during the first half of next year and in view of the slumping demand for the iPad tablet, which it said was a result of the iPad mini’s cannibalization.
Hon Hai, the flagship unit of Foxconn Technology Group (富士康科技集團), assembles iPhones and iPads for Apple.
“We believe the market’s expectations of both products are too high and expect Wall Street to lower their forecast over the coming months,” Taipei-based Macquarie Securities analyst Daniel Chang (張博淇) wrote in a report dated Thursday.
Macquarie also expects iPhone 5 shipments during the fourth quarter of this year to touch 44 million units, which is lower than an earlier forecast of 48 million units.
It also expects iPhone 5 shipments to drop by between 35 and 40 percent sequentially to between 26 million and 28 million units during the first quarter of next year, with the figure slipping further to 22 million units in the second quarter of next year.
The feeble demand could also be a result of less differentiated designs and the shortening gap between Apple and its rivals, given that various new models are expected to be launched during the first half of next year by Apple’s competitors, Chang said.
Hon Hai, Apple’s main manufacturer, could see its operating margins negatively affected during the first six months of next year due to a low shipment forecast for the high-margin iPhone 5, Chang said.
In a separate report, US bank Citigroup Inc maintained its “buy” rating on Hon Hai and its target price of NT$132 for the stock, saying the Taiwanese electronics maker could enhance its bargaining power with Apple as it supplied more components for the iPhone 5.
Citigroup now forecasts total iPhone shipments in the first quarter of next year to total about 45 million units, higher than its original estimate of 40 million units.
Hon Hai shares closed down 4.69 percent at NT$91.5 on Friday in Taipei.
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
Until US President Donald Trump’s return a year ago, when the EU talked about cutting economic dependency on foreign powers — it was understood to mean China, but now Brussels has US tech in its sights. As Trump ramps up his threats — from strong-arming Europe on trade to pushing to seize Greenland — concern has grown that the unpredictable leader could, should he so wish, plunge the bloc into digital darkness. Since Trump’s Greenland climbdown, top officials have stepped up warnings that the EU is dangerously exposed to geopolitical shocks and must work toward strategic independence — in defense, energy and
Motorists ride past a mural along a street in Varanasi, India, yesterday.
For the second year in a row, a Brazilian movie has wowed international audiences and critics, securing multiple Oscar nominations and drawing fresh interest in the Latin American giant’s film industry. Experts say the success of The Secret Agent, which has won four Oscar nominations, a year after I Am Still Here won Brazil its first Oscar, is no fluke, with a bit of a push from the country’s political climate. “This is neither a coincidence nor a miracle. It is the result of a lot of work, consistent policies, and, of course, talent,” Ilda Santiago, director of the Rio International Film
RSS