If the new touch technology that was introduced in the new Apple iPhones is a hit amongst the consumers, some of the component suppliers of the firm in the US and Asia may turn out to be significant beneficiaries. On Wednesday, the Cupertino, California-based company unveiled its latest iteration of the iPhone, the iPhone 6S and the iPhone 6S Plus, which boast the 3D Touch technology. This tech has the capability of distinguishing between a light tap on the device and a heavier press. It will enable the users to control the device differently, depending on how much they push on the surface.
Apple Inc. is the first company to take advantage of this technology in its MacBook computers and smartwatch. Similar to a number of other handset providers, the smartphone giant doesn’t make its phones itself. Instead, assemblers are hired for this purpose such as Hon Hai Precision Industry based in Taiwan, which is also recognized by the trade name of Foxconn Technology Group. Apple provides the designs to these assemblers for putting together the firm’s gadgets. Parts from several other outside suppliers are used by Apple, most of which are based in Taiwan and other parts of Asia. This frees up the iPhone maker from running production lines that are mostly labor-intensive.
According to some analysts, the new 3D touch technology could lead to increased demand, which would move down to supply chains. It could act as a catalyst for stimulating the demand of smartphones, which has slowed down as the market reaches saturation. The statistics from research firm Counterpoint show that the percentage of such touch-enabled smartphones all over the world is around 3% of the global smartphone market this year, but it could actually reach 19% by next year and go even further to 28% by 2017. It has also been estimated by analysts that the addition of technology such as 3D Touch in smartphones could boost the potential revenue of suppliers to $6 billion in the next two years.
The Apple Inc. suppliers really do need this boost, especially considering the fact that they saw a slide in their shares after Apple’s event, which failed to impress the public. The suppliers that were impacted by this less than stellar event of the tech firm included Foxcon, Pegatron, Catcher Technology and Taiwan Semiconductor Manufacturing. The declines also pressured Apple-linked plays in Japan, particularly Alps Electronic, which suffered a 3.2% decline. Other victims included TDK Corp and Ibiden, Murata Manufacturing Co.
Apple itself didn’t fare well after the announcement of the products and saw a 1.9% decline. This was primarily because of the pricing strategy used by the iPhone maker for its new phones. Sure, it has added the 3D touch and a few other enhancements here and there, but they aren’t enough to get customers to upgrade for the same price. However, this decline could also be because expectations are always high with Apple announcements and it is not possible for the company to meet that bar and satisfy everyone.