Apple needs Chinese customers, but some Chinese companies need Apple even more

An assembly line in China that works on Apple products.
An assembly line in China that works on Apple products.
Image: Reuters/Aly Song
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Apple’s stock price has fallen 6% since the company introduced the iPhone 5S and 5C, as disappointed analysts and consumers criticized everything from the phones’ premium prices to their lack of mind-blowing features. Chinese consumers were particularly dismissive of the new devices (and the company’s underwhelming Beijing launch), and now stocks of Chinese companies linked with Apple are suffering as well.

The lackluster reception to the new iPhones in China is already translating into lower demand. It took five days for China Unicom to log 100,000 pre-orders for the new phones; it hit that mark in a single day for the iPhone 5. RIval China Telecom, meanwhile, has trim its subsidy for the new iPhones by 15% which could hurt sales further.

The Chinese companies on Apple’s official suppliers list have become proxies for mainland investors who can’t buy Apple shares directly, and they haven’t fared well either since Sept. 10, the day before the phones were launched in Beijing:

  • Suzhou Anjie Technology: Shares in the Suzhou-based component manufacturer are down 13% since Sept. 10, the day before the iPhone 5C and 5S launch in Beijing.
  • GoerTek: Shares in the Weifang-based headphones and hands-free devices manufacturer have fallen 8% since Sept. 10.
  • Universal Scientific Industrial: Shares in the Shanghai-based electronic product design and manufacturing company have dropped 11% since Sept. 10.
  • Han’s Laser Technology: Shares in the Shenzhen company, which makes lasers for manufacturing, have fallen 8% since Sept. 10.

China’s importance to Apple as a growth market has been increasingly emphasized by analysts in recent quarters. Key to that growth is a yet-to-be revealed deal with state-owned China Mobile, the world’s largest mobile company by subscribers and the sole Chinese carrier without an Apple distribution deal.

Apple’s need to appeal to Chinese, analysts say, leaves China Mobile with leverage in the negotiations. As these stock prices show, though, Apple is just as important to some Chinese companies as Chinese customers are to Apple.