(Yicai Global) Jan. 4 -- Shares of many Apple suppliers in China dropped yesterday after the California-based tech giant cut its Christmas holiday sales forecast for the first time in 16 years, per the New York Times, with Apple's major assembler Taipei-based Hon Hai Precision Industry -- better known as Foxconn -- down 1.71 percent to close at TWD68.9 (USD2.20).

Apple lowered its expected revenue for the first fiscal quarter of fiscal 2019 to USD84 billion, as against earlier guidance of USD89 billion to USD93 billion, citing weaker-than-expected sales in China, a letter Apple chief executive Tim Cook sent to investors yesterday relates. Apple's shares dropped 7 percent in post-market trading on the missive.

The epistle also torpedoed the shares of several listed companies that provide components to Apple. Chip provider Taiwan Semiconductor Manufacturing [NYSE:TSM] crumpled by 1.06 percent to close at USD36.5. Apple's speaker and handset supplier Hong Kong-headquartered AAC Technologies Holdings [HK:02018] retreated by 5.41 percent to close at HKD41.040 (USD5.20), while handset lens vendor Zhejiang province-based Sunny Optical Technology (Group) [HK:02382] subsided 4.2 percent.

The letter also eviscerated several domestically-traded A-shares, with Suzhou Dongshan Precision Manufacturing [SHE:002384] bottoming out at the 10 percent limit down bourse rules impose shortly after opening, while Beijing-based Jones Tech [SHE:300684] and Shenzhen Sunway Communication [SHE:300136] have both flopped over 8 percent in each of the last three trading sessions.

Apple's sales volumes for last year's fourth quarter and this year's first quarter came in below expectations, Yan Fan, Merchants Securities' chief electronics industry analyst, said in a report, which noted that the market has already absorbed many negative effects through supply chain channels. 

Apple's suppliers cannot swim against this adverse current and grow under such difficult circumstances without diversifying their supply array and upping their market share, the report added.

Editor: Ben Armour