Apple Inc. (NASDAQ:AAPL) iPhone 6 release on September 19th has negatively affected smartphone exports from South Korea, says a report from CNET. The Ministry of Trade, Industry and Energy of the country reported that the smartphone exports plummeted by 35.5% last month on a YoY basis to just $1.1 billion.
Apple iPhone 6 blamed for declining exports
The broad-based decline in the smartphone exports from Korea has been blamed by the ministry on the launch of the two new iPhone 6 models by Apple, and also on the growth of Chinese smartphone manufacturers in the low-to-mid range market.
Peter Lynch was one of the best growth investors of all time. As the Magellan Fund manager at Fidelity Investments between 1977 and 1990, he averaged a 29.2% annual return. Q1 2021 hedge fund letters, conferences and more The fund manager's investment strategy was straightforward. He wanted to find growth companies and sit on them Read More
Korea exports smartphones to many markets globally and while exports to U.S. were on the rise during October, exports to China and Japan, which are the world’s second and third-largest markets respectively, declined. Cellular phones (including non-smartphones) exported by Korea were worth $2.42 billion for the month. From the same period a year ago, this was a decline of 17.7%.
The rise in the volume of smartphones exported to the U.S. was 17.1% in comparison with last year, and the total volume was $670 million. Exports to countries like China and Hong Kong have fallen by 5.9% to $710 million. Xiaomi is dominating the Chinese smartphone market by manufacturing premium devices at low prices. A massive decline of 36.8% was noted in exports to Japan, which is known for being a strong market for Apple products.
New devices from Samsung, LG to help export numbers
Two countries of major significance for Korea and its flagship conglomerate Samsung are Vietnam and Brazil, and exports to these countries saw a significant increase. A rise of 52.6% was noted in exports to Vietnam, which hit $330 million, while an increase of 12.8% million was noted in exports to Brazil, which came in at $100 million.
A ray of hope in the bad news is that the two new smartphones launched– Samsung Galaxy Note 4 and LG G3 – helped smartphone exports exceed the mark of $1 billion for the first time in three months. Samsung will soon launch a new series of smartphones – the ‘Galaxy A’ series, and LG will soon be releasing a set of new devices falling under the G3 family of phones. Both of these should help in improving exports.
However, the ministry warned that Apple Inc. (NASDAQ:AAPL) iPhone 6 sales will improve with the start of the holiday season, and that competitors based in India and China could impact the Korea’s exports further.