Apple iPhone 6 Production Lifts Asian Electronics Output; Economic Gains 'Significant'

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By Reissa Su | July 25, 2014 4:13 PM EST

After Apple's record June quarter earnings report, analysts and investors look forward to the launch of the iPhone 6. The highly anticipated next generation iPhone is a "significant factor" in the current economic activity in several economies in Asia.

REUTERS
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo in this file photo taken June 26, 2014. Apple Inc posted a worse-than-expected 6 percent rise in quarterly revenue July 22, 2014, after selling 35.2 million iPhones into an increasingly competitive smartphone market. Picture taken June 26.

According to a Wall Street Journal report, analysts expect companies in Japan, South Korea and Taiwan that supplied earlier iPhone versions to make key components of future Apple products such as microprocessors, camera lenses and displays.

Reports said some of Apple's key suppliers have announced increasing forecasts and earnings. Analysts call this the "Apple effect" on Asian economies and technology sectors. The preparation for the upcoming iPhone 6 rollout has created a ripple effect as component makers report higher revenues. Some nations also noted a boost in electronic exports.

Apple has not publicly named its suppliers for its next generation iPhone, but the company has asked them to produce up to 80 million units of iPhones, leading up to the holiday quarter. According to reports, the number of orders is three times more than Apple's orders for the iPhone 5S and 5C.

Analysts predict that Apple will set a new record by launching two new iPhone models this September. Rumours have also circulated that Apple has been sourcing parts and key components across Asia before production begins in August.

Japanese government officials reveal that its country's electronic exports have increased by 5 per cent. Japan's exports for electronic components went up 4.4 per cent in May despite the decline in total exports by 2.7 per cent.

Taiwan's exports also rose to almost 8.6 per cent due to gains in semiconductor production to meet Apple demand. It was the highest increase in 17 months based on analysts' data.

Credit Suisse analyst Randy Abrams had expected component production for the next generation iPhone will contribute about $17.9 billion to $26.9 billion in revenue for Taiwanese suppliers in 2014. ING Singapore economist Tim Condon believes Taiwanese exports will get a boost from iPhone production. Exports have been previously sluggish since 2011.

Masterlink Investment Advisory economist Anita Hsu said the increase in semiconductor production is "100 per cent related to the iPhone launch." Apple's business has become beneficial to the growth of Asian companies. Analysts said there are only a handful of tech manufacturers who control a large production volume. 

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(Photo: REUTERS / Yuya Shino/Files)
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo in this file photo taken June 26, 2014. Apple Inc posted a worse-than-expected 6 percent rise in quarterly revenue July 22, 2014, after selling 35.2 million iPhones into an increasingly competitive smartphone market. Picture taken June 26.
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