HEXUS.sharewatch: Apple hit by Japan and analyst downgrade

A bugbear of ours here at HEXUS.channel is SEO journalism - headlines designed primarily to appear on search engine keyword searches - but sometimes several trending topics coincide legitimately.

Last week we took a look at the effect on the UK channel and the global technology component supply of the crisis in Japan. Right now the consensus seems to be that the global economic consequences of this calamity will be manageable, but there is a growing feeling that one tech company is more exposed than the rest.

And that just happens to be the biggest: Apple. The focus is specifically on the iPad 2, which was facing lead times of a month or so on orders before the quake. Anticipated shortages of Flash memory, LCDs and silicon wafers are leading many to speculate that supply of iPad 2s maywell be further constrained as a result, which in turn could harm Apple's bottom line in the mid-term.

Another contributor to the poor performance of Apple's shares last week was a rare analyst downgrade, covered in by this amusing headline in the WSJ: Blasphemer!: Meet The Analyst Who Downgraded Apple.

The rationale behind this downgrade was an observed slowdown at Hon Hai - the contract manufacturer that makes most Apple products. The analyst rejected alternative explanations for the slowdown, such as acceleration prior to Chinese New Year, or diversification of Apple's manufacturing partners, and concluded the likely cause is slower sales on the part of Apple.

Having said all that, Apple's shares only declined by 6.1 percent in a week when all our stocks move backwards, presumably as a result of events in Japan and Libya. ARM and NVIDIA will be relieved to have arrested their relative decline.