Suppliers profit up 29% on new Apple product launches

By , Nov 8, 2012

A high tide lifts all ships, especially if it is Apple. That’s the word today from one observer who says Apple suppliers are enjoying a 29 percent profit boost due to “blockbuster new products” recently released. Apple’s key suppliers saw their profits increase dramatically compared to the usual (and paltry) two percent growth and much higher than September’s tepid one percent increase, Wall Street analyst Brian White told investors Thursday. The reason: Apple’s line of new products, including the iPad mini, iPhone 5, a thinner iMac lineup and refreshed MacBooks

White of Topeka Capital Markets wrote Thursday (via AppleInsider) in his monthly supply chain report that the new products should make up 80 percent of Apple sales during the holiday quarter.

When Apple’s iPad mini recently went on sale, analysts reported that it accounted for most of Apple’s tablets sold that weekend.

The iPhone 5 and iPad mini are blockbuster new products that we believe will prove to be big hits this holiday season and into 2013, combined with the new iPad, MacBook Pro, iMac and iPod lineup.

Although he said Apple’s stock has recently been under “selling pressure”, White renewed his twelve-month price target of $1,111, which is more than twice the value of the tech giant’s stock when trading began Thursday.

The news of profits for suppliers is likely welcome after weeks of headlines emphasizing slowdowns, supply glitches and backdoor bailouts of financially-troubled companies.

Earlier today, we reported on Wall Street analyst Shaw Wu’s belief that any supply snags have shifted away from component makers to assemblers, such as Foxconn.

Other close observers of Apple’s financial reporting suggested the iPhone maker may have slipped troubled Sharp $2 billion to restart idle production lines for the iPhone 5.

Today’s news of rising supplier profits is just the latest sign how tightly some global companies have tied their fate to the success of Apple. The company no longer has only its investors to protect, but an ecosystem of suppliers that grows each day.

As demand for PCs shifts to mobile devices, including the iPhone and iPad, the old financial saying that when Main Street gets a cold, Wall Street catches pneumonia needs to change. When Apple catches the sniffles, suppliers go on life-support. Happily, Apple’s financial health is strong, for now.

What do you think?

Are suppliers getting a large enough piece of Apple’s profit pie?

  • Share:
  • Follow:
  • http://www.facebook.com/joe.jonsen Joe Jonsen

    the world loves apple