Asia suppliers lose ground after Apple event fails to impress

A customer uses his iPad outside an Apple store in Shanghai.
Peter Parks | AFP | Getty Images

Asian suppliers whose components go into Apple's snazzy products saw their shares slide on Thursday after a highly anticipated product event by the technology giant failed to inspire.

Taiwan-listed Hon Hai Precision Industry Co., which is better known as Foxconn and is an assembler of the iPhones and iPads, closed down 1.1 percent at T$84.06, underperforming the broader index which slipped 0.2 percent.

Large-cap Taiwan Semiconductor Manufacturing Co. (TSMC) slid 3.1 percent, while major suppliers such as Catcher Technology and Pegatron fell 1.6 and 0.8 percent respectively.

On the other hand, TPK Holding and Zhen Ding Technology Holding endured choppy trade. Shares of the former surrendered early gains to close down 0.4 percent, while the latter – Foxconn's semiconductor unit – pared losses to inch up 0.1 percent at the end of Thursday's session.

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Both companies are major suppliers of Apple's 'Force Touch' technology, which has been renamed as '3D Touch' at the event overnight and will be applied to the new iPhone 6S.

In Japan, Apple-linked plays were similarly pressured by the declines overnight.

Alps Electric, a Tokyo-based electronics supplier, was the biggest loser with a fall of 3.2 percent. Electronics parts makers such as Ibiden, Murata Manufacturing Co. and TDK Corp also slumped between 1.1 and 2.8 percent.

To be sure, there are Apple-related companies which escaped the selloff. Taiwan-listed Quanta Computer finished 2.8 percent higher, while shares of Redington India – a leading distributor for Apple products in India – notched up 0.8 percent in early trade.

Why Apple shares fell after product launch

The verdict on Apple event

On Wednesday, the U.S. technology giant unveiled a TV set that responds to voice commands, alongside new iPads, Apple Watch features and a surprise device called the Pencil. Meanwhile, the company's biggest money maker – the iPhone – will come with a better camera, faster chips and the force-sensitive technology '3D Touch.'

However, Apple fell 1.9 percent to settle at $110.15 on Wednesday, prompting investment banking firm Jefferies to cut its price target for the stock to $126 from $130. Jefferies has a 'hold' call on Apple.

According to John Petrides from Point View Wealth Management, the negative reaction on Wall Street stemmed from Apple's pricing strategy and as the new products failed to impress investors.

"Although the '3D Touch' is really cool, is that enough to get a person to upgrade to the 6S when you can buy the [iPhone] 6 at just $99? I think this is just an evolutionary transition for the iPhone, not at all revolutionary," the managing director and portfolio manager at Point View Wealth Management told CNBC on Thursday.

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"We've seen in the past when Apple went from iPhone 4S to the 5 and consumers will wait if it's not revolutionary. That will put pressure on Apple's margins and that's why the stock went down," he added.

Others point to the stock's recent history following previous product rollouts.

"People love to hate Apple announcements because the expectations are so high and they can never clear that bar," Kevin Landis, portfolio manager of the US$111 million Firsthand Technology Opportunities fund, told Reuters.

According to data provided by BTIG Research, Apple shares have lost an average of 0.4 percent on the day of iPhone announcements over the past three years.

— Reuters contributed to this report