Becoming a supplier to tech giant Apple (AAPL) is a huge win for a company -- but it also comes with big risks, as Imagination Technologies (IGNMF) learned on Monday when its shares plummeted more than 60% after announcing that Apple would stop using its graphics technology for its iPhones, iPads and Apple Watches.
Apple warned Imagination Tech that it was going to develop its own graphics technology and thus would no longer need its services within 15 months to two years. Previously, Apple had accounted for about half of Imagination Technology's revenue. On Tuesday, shares were rebounding slightly, with the stock up 5.1% to $1.45.
"The biggest risk to Imagination's business model was realized this morning," analysts at Investec told Reuters. "The loss of this revenue stream will have a material impact on the financials of the company."
In 2016, Apple spent about $50 billion at US-based suppliers, CEO Tim Cook said at an annual shareholder meeting in February. "We're always looking for more ways to help our country," Cook said. "We know that Apple can only exist in the US." His comments came as the new administration has been firm that it wants to keep jobs in the U.S.
Apple published a list of its top 200 suppliers on its website in February and noted that the companies on the list accounted for at least 97% of its procurement expenditures for materials, manufacturing and assembly of its products worldwide in 2016.
Previously, Apple has dropped Portal Player, Sigmatel, CSR and Wolfson from its supply chains, dealing major blows to their businesses. To see which other companies' fortunes are most tied to Apple, TheStreet has put together this slideshow of the ten public companies that get the highest percentage of their revenue from Apple, according to data collected by FactSet.
Editor's pick: This article was originally published on April 3.
Percentage of revenue from Apple: 75%
Market cap: $570 million
Flexible circuit board maker Multi-Fineline Electronix (MFLX) is the public company that's the most reliant on Apple for its revenues, according to FactSet. Shares of the company are down slightly over the past year but up over 11% YTD as of on Monday.
The company's dependence on Apple actually peaked at about 80% for the 2015 third quarter, with 71% of it being related to smartphones and the remaining 9% related to tablets.
Percentage of revenue from Apple: 66%
Market cap: $3.9 billion
Chip supplier Cirrus Logic (CRUS) is highly reliant on Apple and is trading up over 60% in the last year and more than 6% YTD to $60.35 as of Monday. The company got a boost when Apple decided to use Cirrus-powered wireless headphones for the iPhone 7/7+, released last September.
However, the Austin, Texas-based company took a hit in late February after giving a weaker-than-expected outlook for the March quarter. The company sees sales rising 38% to $320 million for the quarter, vs. expectations for $333 million in sales. The downbeat guidance is partly a result of the fact that the upcoming iPhone 8 is no longer expected to use active noise cancelling technology from Cirrus.
Percentage of revenue from Apple: 54%
Market cap: $158.2 billion
Japan Display (TYO -- 6740) announced earlier this year that it would start offering flexible LCDs in 2018 by replacing the glass layer with plastic. While Apple remains a potential client for the technology, Samsung (SSNLF) is its main screen supplier. In fact, word broke on Monday that Apple had ordered 70 million bendable organic light-emitting diode (OLED) panels from Samsung, presumably for the iPhone 8, according to Nikkei Asian Review. This will be the first time that Apple will employ a curved screen, something Samsung has been doing for a few years.
The stock is trading up over 22% in the past year, but is down 21% YTD to $263 on Monday.
Percentage of revenue from Apple: 53%
Market cap: $293 million
Mobile gaming company Glu Mobile (GLUU) is known for hit games on the Apple App Store such as Deer Hunter and Kim Kardashian: Hollywood & Racing Rivals. The Apple App Store accounted for 53% of the company's revenue for the 2016 third quarter, vs. Alphabet's (GOOGL) Google Play Store, which accounted for 27.1% of the revenue.
The stock is trading down about 17% in the past year, but up 19% YTD to $2.32 on Monday.
Percentage of revenue from Apple: 52%
Market cap: $237.1 billion
Online Game creator GungHo (TYO -- 3765) is known for its hit game Puzzle & Dragons and gets the majority of its revenue from the Apple App Store. On its website, the company says that it wants to reach outside of the Japanese market to become the greatest entertainment company in the world.
So far, the stock is trading down 18% in the past year to $249.
Percentage of revenue from Apple: 49.4%
Market cap: $133.1 billion
Colopl (TYO: 3668) was launched in 2008 and is now one of Japan's largest mobile game developers. The stock is trading down over 55% in the past year, but was up about 5% for the year to $1,045 as of Monday.
Percentage of revenue from Apple: 47%
Market Cap: $70 million
Global supplier of semiconductor test and burn-in equipment, Aehr Test Systems (AEHR) , announced in February that it had received an order in excess of $4 million from a subcontractor to its top customer, which is presumed to be Apple. The company's second-leading customer is Texas Instruments (TXN) , which accounts for 32% of its revenue.
The company is trading up over 300% in the past year and up 95% YTD to $4.71 on Monday.
Percentage of revenue from Apple: 47%
Market cap: $28.2 billion
KLab (TYO -- 3656) is a developer of software solutions for mobile phones. Apple accounts for 47% of its revenue, followed by Alphabet (GOOGL) , which accounts for 35% of its revenue.
The stock is trading up 21% in the past year and was up about 12% YTD to $742 on Monday.
Percentage of revenue from Apple: 46.4%
Market cap: $118.3 billion
Nissha Printing (TYO: 7915) provides printing technology and solutions and is known for its touch-panel technology used in smartphones. Apple's iPad Mini uses the company's thin-film touch sensors.
JL Warren Capital analyst Juheng Li wrote in a note released in February that Nissha Printing will be a beneficiary of the iPhone 8. "For the premium OLED model, Apple will adopt 3D thin film sensor technology made by Nissha Printing (JP 7915) vs the in-cell technology adopted in current iPhone 7s," he wrote. "As the sole supplier of 3D thin film, Nissha will see a material acceleration of revenue growth in 2017/2018, taking large orders away from existing supplier ZDT (Zhen Ding Technology)."
The stock is trading up about 58% in the past year, but is down about 8% YTD to $2,582 as of Monday.
Percentage of revenue from Apple: 46%
Market cap: $2.4 billion
Zynga (ZNGA) develops online social games, such as Chess with Friends, FarmVille and Draw Something. The company relies on Apple for 46% of its revenue, Alphabet for 29% of its revenue and Facebook (FB) for 20% of its revenue.
The stock is trading up about 29% in the past year and is up about 10% YTD to $2.84.