Despite iPhone 12's Blockbuster Success, Apple Component Stocks Remain Gloomy

[Asia Economy Reporter Minji Lee] Although Apple's first 5G smartphone, the iPhone 12, is recording unprecedented sales, component suppliers are not benefiting. Their stock prices remain sluggish due to concerns over falling component prices and low profit margins.

According to Counterpoint Research on the 23rd, the iPhone 12 ranked first as the best-selling 5G smartphone in October, continuing its strong performance. Since shipments of the iPhone 12 Mini and iPhone 12 Pro Max were also reflected in November, when full-scale sales began, the strong sales trend is expected to continue through November and December. The total iPhone 12 shipments for this year are estimated to reach 80 million units. This figure significantly surpasses the 70 million units sold of the iPhone 11 between September and December last year.

On October 30, the day Apple officially launched its first 5G smartphone, the iPhone 12 series, customers entered the Apple Store on Garosugil, Gangnam-gu, Seoul, receiving congratulations from the staff. Photo by Hyunmin Kim kimhyun81@

Changmin Lee, a researcher at KB Securities, said, "With the release of four different models, demand was stimulated among consumers who had not upgraded due to previous high pricing policies and lack of differentiation." He added, "Global mobile carriers' efforts to increase 5G subscription numbers to raise average revenue per user (ARPU) also positively influenced sales." It is reported that over one-third of iPhone 12 and iPhone 12 Pro sales in the U.S. during October were through promotions by mobile carriers.

As shipments increase, a trickle-down effect is expected for major domestic component suppliers through the first half of next year, but stock prices have not shown significant gains due to exchange rate impacts and anticipated low profit margins.

BH, which supplies organic light-emitting diode (OLED) flexible printed circuit board (FPCB) components to Apple, saw its stock price drop about 5% this month. News of a competitor ceasing operations did not significantly affect its stock price. Although component supply has increased with the rise in iPhone 12 sales, low profitability means it has little impact on the company's performance. Additionally, forecasts that the overall component price reduction will be larger than expected have dampened stock enthusiasm. According to Hi Investment & Securities, this year's earnings estimate has been revised down 20% from 77 billion KRW to 62 billion KRW.

ITM Semiconductor expects operating profit of 2.5 billion KRW in the fourth quarter, a 244% increase from the third quarter, through supplying secondary battery protection circuits. However, the stock price rise has been limited to 5%, as margins are estimated to be weaker than market expectations. Dongju Lee, a researcher at SK Securities, explained, "While expectations are high that the order volume will increase due to the expanded iPhone 12 product lineup, the decline in the won-dollar exchange rate and the start of the company's new facility investments make it inevitable to lower the annual earnings forecast."

This content was produced with the assistance of AI translation services.