Citigroup downgrades Apple over supply chain order cuts
Tuesday, December 18, 2012/
Citigroup has downgraded Apple shares from “buy” to “neutral” after the company reduced orders with component suppliers, raising concerns about future growth for the iPhone 5.
The news comes after Apple suffered a lacklustre launch for its iPhone 5 smartphone in China, according to local media reports.
As of November, Apple dropped from the top five smartphone manufacturers in China, where it now trails Samsung, Lenovo, Coolpad, ZTE and Huawei. Apple now claims around 8% of the Chinese market. Meanwhile, according to figures from Analysis International, Android now claims around 90% of the Chinese smartphone market.
China is now the world’s largest smartphone market by volume, estimated to have overtaken the US as of May this year.
According to Bloomberg, near-term supply chain cuts through key component suppliers have raised questions about the immediate growth prospects for the iPhone 5 in the smartphone market.
News of the downgrade has in turn impacted shares in a number of Apple’s suppliers, including iPhone assembler FoxConn/Hon Hai Precision Industry, speaker supplier AAC Technologies Holdings and Flexium Interconnect.