To every
action, there is always an equal and opposite reaction.
Newton
surely wasn’t thinking of the supply chain when he created the laws of motion,
but in today’s investor marketplace, the law often holds true.
As the
darlings of the tech world, everything at Apple is closely monitored, analysed
and measured, especially the supply chain. Recently, at least 5 core analysts
lowered their price targets on Apple amidst reports that the company was
cutting some iPhone parts orders in its Asia supply chain. The stock price
quickly dropped roughly 9%.
Topeka’s
Brian White didn’t see the cuts as a big deal, though “During our October trip
to Asia, we indicated that yield issues for certain components used in the
iPhone 5 would result in supply constraints, which we believe is now driving
Apple to cut orders at certain supply chain vendors for the first time in the
December quarter. Actually, we are a bit surprised that these cuts didn’t occur
sooner.” said White in a note to clients.
Apple’s
stock has since rebounded. Sometimes, the reaction tends to a bit
stronger than the action.
What is
your opinion on supply chain?
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