Photo/Zhang Jian

Jan.4 (NBD) -- Apple suppliers in China are likely to be the first ones to bear the brunt of weak iPhone sales with shares plunging Thursday after the U.S. tech giant slashed revenue guidance for the first quarter of fiscal 2019.

In specific, stocks of its FPC supplier Suzhou Dongshan Precision Manufacturing Co Ltd led the slump by dropping to the daily limit. RF supplier Shenzhen Sunway Communication Co Ltd (Sunway Communication) and camera module supplier O-film Tech Co Ltd (O-film) also fell by over 5 percent.

When reached by news outlet the 21st Century Business Herald, quite a few suppliers said it is still too early to tell what consequences of Apple's such move will bring to our company.

However, financial performance will be less evasive. According to financial information platform Wind, shares of 12 major Apple suppliers in China have dropped by over 20 percent since October of last year.

An economic growth slowdown drove down the global demand of smartphones. In addition, home-grown smartphone makers such as Huawei performed well in the fourth quarter of 2018, winning over some customers from Apple, said an insider at a Shanghai-based large private equity firm to the 21st Century Business Herald.

It is noticed that some listed Apple suppliers have already sensed the danger lurking behind weak sales of iPhones and are seeking for a way out. Reducing dependence on Apple and developing relations with Android-based customers and new products have been the mostly used strategy.

"In addition to Apple, we have become eligible supplier of Huawei and Vivo, and have already started supplying devices for Huawei terminals. Besides, our industrial electronics and telecommunications businesses are in good shape, so we are not very much concerned about the bad consequences of weak iPhone sales," said an insider of the securities department of electronic device provider Jones Tech PLC (Jones).

Jones is also expanding its footprint to high-end manufacturing, automotive electronics and emerging industries such as medical machinery. RF devices of Sunway Communication are also gradually applied to wearable devices, smart cars and auto driving sectors, and the company has established a tie with car manufacturer Saic Motor.

An insider at the securities department of O-film said, "We've known very early that cell phones are undergoing constant changes and the market has been oversupplied with smartphones. Therefore, the company developed smart cars business. Compared with cell phones, smart cars are able to provide a stable source of income as they have longer life cycle and have a greater space for growth."

However, other insiders gave different opinions. They warned that the shipments of other smart electronic devices are limited, unable to sustain the transformation of enterprises.

Although many companies have set foot on the smart home and smart car sectors that can deliver stable transactions, there are no new businesses in sight that can provide the same growth momentum as cell phones do, an analyst with a mid-scale securities company said.

Email: tanyuhan@nbd.com.cn