Global investors dumped stocks in a number of mobile device makers on Tuesday, including BlackBerry maker RIM (Research In Motion), after Apple announced its entry into the mobile phone market with the iPhone.
RIM shares dropped by 7.7 percent on the Toronto Stock Exchange over fears the iPhone may cause users to turn off their BlackBerries and switch to the new Apple smartphone. Shares in Treo-maker Palm tumbled by 5.7 percent on the Nasdaq.
RIM shares had regained ground early Wednesday, up 2.3 percent by early afternoon on the TSE. Just a few weeks ago, the company reported strong third-quarter profits on new subscribers to its popular text service and brisk sales of its first consumer-focused device, the BlackBerry Pearl.
North American companies weren't the only stocks hit by the iPhone.
The contagion quickly spread to Asia, where High Tech Computer, the world's largest maker of Microsoft Windows-based smartphones, dropped by 4.1 percent on the Taiwan Stock Exchange in Taipei.
Shares in South Korean mobile phone maker Samsung, the number-three market share holder after Nokia and Motorola, fell by 1.4 percent, while LG shed 2.7 percent.
Investors in Europe woke up to the news in a similar mood to sell mobile-phone-related shares. Nokia dropped 2.2 percent in Helsinki, while Ericsson fell 1.4 percent.
But the news wasn't all bad. Some companies prospered from the iPhone announcement because they're expected to supply components to the handset. Balda, a German touchscreen supplier, rose by 15.9 percent in Frankfurt on Tuesday, while Taiwan's Catcher Technology, a mobile phone casing supplier, added 5.2 percent on the day.
Apple rose 8.3 percent on Tuesday, mostly after the iPhone news was released. The company's shares were up 5.4 percent at $97.53 early yesterday in trading on the Nasdaq stock exchange.
One analyst urged caution on the new announcement by Apple, noting the iPhone hasn't been tested by the market yet, and that it won't contribute much to the bottom line of component suppliers until later this year. The iPhone is slated to launch in June.
"Furthermore, though we are overall positive on iPhone's launch and its impact to Apple's [supply] chain in Taiwan, we believe the implications to Apple’s suppliers is mixed, with iPhone's exciting market potential and the possible cannibalisation toward its iPod product lines," said Henry King, an analyst for Goldman Sachs (Asia) in Taipei.