Apple Watch set to lift fortunes of Hong Kong component supplier AAC
Supplier of 'haptic' technology for iPhones to ramp up production before new device's launch
The anticipated release of the Apple Watch next year could prove a boon for Hong Kong-listed AAC Technologies, the leading supplier of miniature acoustic components to the iPhone and iPad.
Analysts expect AAC's non-acoustic business, led by its haptics motor products, to become a new growth driver for the company as these components are used in more smartphones, media tablets and wearable computing devices like smartwatches, following the launch of the Apple Watch around spring.
Haptics refers to the technology used on mobile phones and similar devices that enables a user to feel a tactile sensation, such as vibration, when interacting with an application. Video game controllers have used this technology for years, but its adoption for "wearables" could potentially make haptics part of many everyday applications.
AAC makes a range of miniature, low-power motors that can be integrated with other microelectronic components, such as microphones and speakers, to create better and faster haptic feedback.
Daiwa Capital Markets analyst Kylie Huang said the Apple Watch, which she expects to be released late next quarter, has adopted AAC's haptics products after these were built into the new iPhone 6 and iPhone 6 Plus models.
"We see AAC starting a major ramp-up of its haptics products as new software apps and designs come into the market next year," said Huang, who expects such innovation to raise demand from Chinese brands that have smartphone and wearable products.
