Apple
BusinessCompanies
TECHNOLOGY

New iPhone launch to help boost exports from mainland China and Taiwan

Apple's newest device expected to reviveHK's lacklustre smartphone market and contribute 1 percentage point to mainland's export growth

PUBLISHED : Wednesday, 03 September, 2014, 9:47am
UPDATED : Thursday, 04 September, 2014, 8:29am
 

Technology giant Apple is expected to provide a boost to exports from the mainland, the world's largest smartphone market, and Taiwan after the company's newest iPhone is launched next week.

The release of Apple's much-anticipated iPhone 6 could add about 1 percentage point a month to the mainland's export growth for the rest of this year, said a report by Bank of America Merrill Lynch.

Taiwan's export growth could be boosted by about 2 percentage points per month during August and September and 1 percentage point per month from November through to January 2015, said Lu Ting, China economist at Bank of America Merrill Lynch (Hong Kong).

Lu pointed out that the mainland and Taiwan recorded year-on-year export growth rates of 4.9 per cent and 4.4 per cent, respectively, in the second quarter.

"So a boost of 1 to 2 percentage points to headline export growth is no small matter, especially for the currency market which closely tracks export growth numbers," he said.

Apple is widely expected to announce its latest iPhone at a scheduled company event in Cupertino, California, next week.

China - including the mainland, Hong Kong and Taiwan - is Apple's biggest market after the United States. In its fiscal third quarter to June earnings report, Apple posted a 28 per cent increase in revenue from China to US$5.93 billion from US$4.64 billion a year earlier. That made up 16 per cent of its total US$37.43 billion revenue in the quarter ended June 30.

Apple's iPhones, iPads and MacBooks are all designed in the United States, but are manufactured by the mainland factories of contractors.

Suppliers in Taiwan provide the semiconductors and optical components to the mainland contractors for final assembly.

"The launch of iPhone 6 will surely boost China exports when the product is shipped out for global end users," Lu said. "Not all Taiwanese component makers who are key suppliers to iPhone 6 will contribute to Taiwan's exports simply because some of them have already relocated their manufacturing bases to mainland China."

Bank of America Merrill Lynch analysts estimated that 100 million iPhones will be produced on the mainland in the second half of this year.

Of that number, 17 million are forecast to be sold in the mainland, Hong Kong and Taiwan markets during the period, with total sales estimated to reach US$10.3 billion.

Technology research firm IDC forecasts total smartphone shipments on the mainland to reach 224 million units in the second half, driven by 4G mobile services rolled out in more cities across the country and the release of many affordable Chinese-brand handsets.

Kirk Yang, Barclays head of technology hardware research for Asia, excluding Japan, said a strong iPhone replacement cycle is expected worldwide because of the specifications on the latest models, especially a 4.7-inch display in one version and a 5.5-inch screen on the other.

SmarTone Telecommunications chief executive Douglas Li said last month Hong Kong awaited the arrival of a new smartphone, such as the iPhone, to spur interest in what has been a lacklustre market so far this year.

Share

 

Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive