Apple suppliers give thumbs down to new products

Shares of Apple's Asia-based supply chain plunged on Wednesday after the consumer electronics giant`s latest product lineup, including its new iPad Air and iPad Mini, failed to wow investors.

Taiwan-listed camera lens manufacturer Genius, touch screen manufacturer TPK Holding and casing maker Casetek fell 4 percent, 6 percent and 2.2 percent, respectively. While Hong Kong-listed acoustic component maker AAC Technologies declined 1.6 percent.
Shares of Apple, meanwhile, ended down 0.3 percent in the US trading session on Tuesday.
"The supply chain realizes the new products are not going to be a hit. The new iPad Air may do ok, but the Mini isn`t going to sell well because it isn`t priced competitively. They are right to be concerned," said Rob Enderle, principal analyst of the Enderle Group told CNBC.
Late Tuesday, the Cupertino-based company showed off its next generation full-size iPad called the iPad Air - which is lighter and thinner than its predecessor - and a new iPad Mini featuring a retina display. The iPad Air starts pricing at USD 499 for the 16GB WiFi model and will cost USD 629 for the cellular model. The iPad 2 will sell for USD 399. Beyond the new tablets, Apple also introduced new versions of the MacBook Pro laptop computer with longer battery life among other updates.

"I don`t think there`s enough there to appeal to more than their current fan base - I don`t think it will spur the kind of replacement that past products have caused," said Enderle.
Apple`s product launches during the second half of the year are particularly important given the year-end holiday shopping season, which accounts for a large portion of the company`s annual sales.

Brian White, analyst at Cantor Fitzgerald, had a more positive take on Apple`s latest offerings, characterizing the iPad refresh as the "most significant" since the original iPad went on sale in April 2010.

"We were not disappointed. In fact, Apple surprised us on the upside. With Apple announcing that 170 million iPads have been sold since the introduction of the iPad, we believe this will prove to be a major upgrade cycle," White said.
Marc Einstein, industry principal, Consumer Telecommunications and Digital Media, Asia Pacific at Frost and Sullivan also expects the new products will be well received by consumers, particularly given that their availability coincides with the holiday season.
"There are a lot of first time buyers out there that don`t own a tablet yet. For everyone four smartphones in the US, you have one tablet," he said, noting that the new iPads could help Apple grow its share in the tablet market of developed countries where consumers are less price sensitive.

-By CNBC`s Ansuya Harjani; Follow her on Twitter @Ansuya_H Copyright 2011 cnbc.com