Apple's (AAPL +2.62%) stock was roughed up last week.
The leading consumer tech giant saw its shares tumble 9% on the week, and this is before tomorrow's quarterly report. The market's bracing itself for soft results, but a 9% weekly plunge ahead of the actual financials seems more than a bit overblown.
However, if you think Apple had it bad, check out how the market pummeled a few of the companies that have long been viewed as Apple sympathy plays. After all, if Apple's prospects are diminishing, one would expect that the iOS beneficiaries would also be taking a hit.
Let's check out a few Apple-related companies that posted double-digit percentage declines this past week.
|
Company |
April 19 |
Weekly Loss |
|---|---|---|
|
Cirrus Logic (CRUS +0.07%) |
$17.77 |
(17%) |
|
ZAGG (ZAGG +0.00%) |
$6.60 |
(11%) |
|
OmniVision (NASDAQ: OVTI) |
$12.39 |
(10%) |
Source: Barron's.
Let's start with Cirrus Logic.
The audio chip maker crashed after announcing disappointing preliminary quarterly results. The prominent Apple supplier is warning the revenue will come in below Wall Street's expectations, and a problematic inventory reserve suggests that one its customers -- possibly Apple -- is scaling back on audio chips.
Yes, Cirrus Logic made its own bed. It did have unsettling news leading to its decline. However, ZAGG and OmniVision suffered considerable drops just because they were in the wrong niche at the wrong time.
ZAGG makes third-party accessories for consumer electronics. Its flagship product is invisibleSHIELD -- the scratch-proof film that helps protect smartphone and tablet screens -- but ZAGG also puts out mobile keyboards, headphones, and cases. As one can imagine, if Apple products aren't selling briskly, there isn't likely to be a lot of demand for ZAGG products. Strength in Android products can help, naturally, but ZAGG remains a popular play on Apple's coattails.
OmniVision makes image sensors, and this has become a very important niche as smartphones and now even tablets raise the bar when it comes to the quality of their cameras. The stock's been volatile in recent quarters as cutthroat competition has driven down margins, but OmniVision's fundamentals were starting to bounce back. Revenue more than doubled in its latest quarter. However, if smartphones and tablets aren't selling well, it's naturally assumed that OmniVision will be weak.
Apple's bandwagon gets a flat tire
You can expect these companies to continue to follow the lead set by consumer tech in general and Apple in particular.
It won't just be Apple rooting for a strong report tomorrow.
