Problems in China may collapse Apple stock prices
2022.11.29 08:18
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Problems in China may collapse Apple stock prices
Budrigannews.com – NASDAQ: AppleDue to China’s persistent supply chain headwinds, stock closed yesterday down 2.6%, a new three-week low.
Bloomberg News recently reported that Foxconn, Apple’s primary supplier, may cause a production shortfall of close to six million iPhone Pro units this year.struggles to maintain full operational capacity at its primary factory in Zhengzhou.
After online videos showed violent protests and clashes with police and security, both Apple and Foxconn said they are focused on getting workers back to assembly lines in Zhengzhou.The vast majority of iPhone 14 Pro and Pro Max devices are manufactured at Foxconn’s Zhengzhou facility.
These devices are arguably Apple’s two most important hardware products due to the high demand for them since their launch in September.
The situation in China “has been an absolute gut punch to Apple’s supply chain,” analysts at Wedbush stated yesterday.
We estimate that Apple is currently experiencing significant iPhone shortages, which could result in a drop of at least 5% of units during the quarter and as much as 10%, depending on how Foxconn production and protests unfold in China over the next few weeks.In a client note, they wrote, “We are seeing major shortages of up to 35%/40% of typical inventory in many Apple stores for the iPhone 14 Pro heading into December.
Online channels are pushing deliveries into early January in many cases, depending on model, storage, and color.”
iPhone estimates were also revised today by analysts at Evercore ISI to account for challenges in China.Even though they continue to insist that this revenue is deferred rather than lost, the analysts reduced their estimates for iPhone revenue for the December quarter by $8 billion.
“The protests against the lockdowns in China are getting bigger, and it’s possible that the situation gets worse and hurts end-demand in China.”“The bigger challenge is iPhone production, so far we think demand implications are minimal,” the analysts wrote in a note.
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