Apple's Chinese suppliers reshuffled with launch of iPhone 5
Staff Reporter 2012-09-19 11:31
Chinese suppliers to Apple could be set to make enormous profits — or lose them when the contract shifts. (Photo/Xinhua)
The launch of Apple's new iPhone 5 on Sept. 13 has triggered a reshuffle of the technological giant's suppliers in China, who earned an estimated US$518 million from contracts with the American company in 2011, according to the website of Guangzhou's 21st Century Business Herald.
While only eight Chinese companies were named in the list of 156 suppliers in a corporate social responsibility report Apple published on Jan. 14, the newspaper said Chinese companies were mostly contract manufacturers or suppliers of components with low technological expertise and low profit margins.
Out of Apple's net profit of US$25.92 billion in 2011, Chinese suppliers earned around 2% despite Apple's popularity in China, estimated the newspaper.
One Chinese company which benefits from supplying to Apple is Suzhou Anjie Technology Co, whose largest terminal customer has been Apple since 2008, the newspaper noted. In 2010, business with Apple accounted for 48.8% of Anjie's revenue, according to the company's financial report.
Anjie saw revenue grow 29% to 255 million yuan (US$40.3 million), while its net profit surged 82% to 82 million yuan (US$13 million) from last year during the first six months of 2012. Its core business is forecast to grow rapidly during the first three quarters of this year.
Anjie advertised itself as an Apple supplier when it was listed in November 2011, and has seen its share price climb from the issue price of 23 yuan (US$3.64) per share to a peak of 60.28 yuan (US$9.54) per share on Sept. 6.
Another Chinese firm called Shenzhen Laibao Hi-Technology Co, which was once considered a top Apple-concept stock for supplying touchscreens to the Taiwan-based TPK, suffered a different fate. Shenzhen Laibao was excluded from Apple's supply chain with the launch of iPhone 5, an analyst told the website.
Laibao was once the main supplier to TPK before the Taiwanese company acquired Cando Corp, which produces the same components, in May 2011. Since then Laibao's market share had been declining, the newspaper said.
TPK itself has also been replaced by companies such as LG Display and Sharp, which offer the new in-cell touchscreen panel Apple is using for the iPhone 5.
Laibao's semi-annual report revealed that its revenue had dropped 5.05 percent to 600 million yuan (US$94.9 million) from last year during the first six months of 2012, while its net profits had plummeted 69.62% to 80.9 million yuan (US$12.8 million) during the same period.
