Apple Continues Mobile Phone Sales Growth... Focus on LG Innotek, Samsung Electronics, and SK Hynix

KB Securities Report

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] KB Securities stated on the 26th that as iPhone shipments are expected to continue increasing this year, it is advisable to expand interest in domestic companies supplying parts.

According to Apple Insider, Apple is expected to announce first-quarter (October?December) earnings on the 28th (Korean time) that meet or exceed market consensus despite supply chain disruptions, driven by strong iPhone 13 sales. Based on Bloomberg estimates, Apple's first-quarter revenue, gross profit, and earnings per share are projected to be $119.5 billion, $49.9 billion, and $1.91 respectively, representing increases of 43.3%, 42.1%, and 54% compared to the previous quarter.

Apple has held the number one position in smartphone sales in the Chinese market for the past six weeks. This contrasts with global competitor smartphone companies that experienced sales declines after ranking first in global smartphone market share in the fourth quarter of last year. Dongwon Kim, a researcher at KB Securities, explained, “Apple is aggressively marketing the iPhone 13 in China based on an aggressive pricing strategy. Despite global parts supply chain disruptions, selective marketing focused on increasing iPhone 13 shipments in the Chinese market appears to be effective, and for the time being, there is no rival to the iPhone in the global smartphone market.”

This year, Apple is expected to release two new iPhone models in the first and second halves of the year. The budget 5G iPhone SE is planned for release in April, and the strategic new model iPhone 14 is expected to launch in September. The 5G iPhone SE, to be released in April, is anticipated to feature a 4.7-inch display, 5G connectivity, and the same A15 chip as the iPhone 13, making it highly cost-effective. The iPhone 15, scheduled for release in September, is predicted to undergo a full camera specification overhaul for the first time in seven years since the 2015 iPhone 6S, with camera resolution improving approximately fourfold from the basic 12 million pixels to 48 million pixels.

KB Securities identified Samsung Electronics, SK Hynix, and LG Innotek as the top preferred stocks related to the iPhone. The DRAM to be installed in the iPhone 14, launching in September, will be greater in quantity compared to the iPhone 13 to support low-power high-resolution displays and high-spec cameras. This is expected to positively impact DRAM shipments from Samsung Electronics and SK Hynix. LG Innotek, which accounts for 78% of its sales from the iPhone, is expected to be the biggest beneficiary of the new iPhone product launch and increased shipments. Researcher Kim analyzed, “The 5G iPhone SE model launching in April will partially offset the off-season in the first half before the iPhone 14 release,” and “the improved camera performance of the iPhone 14 will lead to a price increase.”

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