Here’s an interesting note from Topeka Capital analyst Brian White.He says Wintek, which supplies touch screen panels for Apple, had a horrible June. Sales were down 34% on a month over month basis, which is one of the biggest drops in almost seven years.
He warns that it may be because Apple is shifting its business away from Wintek. However, it could also mean that Apple is going to have a relatively weak third quarter this year.
Here are the key points from White’s note:
- Wintek Reports a 34% mum Sales Decline in June. This morning, Wintek reported consolidated June sales of NT$5.22 billion, down 33.6% mum and much worse than the average mum June sales increase of 1% over the past seven years. Based on our records, this appears to be the biggest mum sales drop for Wintek since the later part of 2008 and one of the most significant drops we have on record (back to 2005). We would not overreact to the weakness at Wintek as it relates to Apple because we believe Wintek may be losing market share in key next generation Apple products and therefore ramping down certain programs.
- Wintek May be Losing Market Share with Apple. In the past, we estimate Wintek generated over 50% of total sales from Apple as an important touch panel supplier in products such as the iPhone and iPad; however, we believe the company may be losing market share in next generation products. For example, Digitimes has previously indicated that the next generation iPhone could use in-cell touch panels from Sharp and Toshiba at the expense of Wintek and TPK Holdings. At the same time, the Chinese character website Apple Daily recently indicated that Apple may launch an upgraded 9.7-inch iPad in September that features IGZO panels from Sharp that is expected to result in a thinner form factor, longer battery life and what we believe could be an improved viewing experience. Finally, we have highlighted our expectation that an iPad Mini could launch in September. Clearly, Apple has many next generation products on the horizon and the Company may be adjusting its suppliers.