Apple (AAPL) Stock Drops as Protests Impact Production in China
If any product is associated with Apple (NASDAQ:AAPL) nowadays, it’s the iPhone. However, AAPL stock traders are feeling anxious today because of a problem occurring with iPhone supplier Foxconn. Specifically, disruptions at a factory in China stemming from Covid-19 lockdown protests could make it more difficult to bring iPhones to market this quarter.
The timing really couldn’t be worse for Apple. All eyes are on holiday shopping sales as investors wonder whether consumers will buy pricey iPhones this year. With inflation starting to cool but still elevated, people may be reluctant to “shop ’til they drop” in December.
Yet, the issue at hand today isn’t about demand for iPhones. It’s about Apple’s ability to supply them. This morning, a Bloomberg report warned that, due to unrest at a China-based Foxconn factory, Apple could face an iPhone Pro production shortfall of roughly 6 million units. Apple and Foxconn do expect to be able to make up this production shortfall next year, however.
What’s Happening With AAPL Stock?
AAPL stock is down nearly 2% as of this writing as traders absorb the Foxconn factory disruption and its implications. At this time, the major stock market indices are also in the red.
Clearly, investors are concerned about the latest round of Covid-19 restrictions in China. Apparently, workers at Foxconn’s production facility in Zhengzhou are protesting Covid-related restrictions as well as overdue pay.
Apple introduced its new iPhone 14 Pro and Pro Max models back in September. It’s disappointing, no doubt, that the company is already facing supply issues that could make it difficult to get these products to consumers in a timely manner.
Previously, Apple reduced its fourth-quarter iPhone production target from 90 million to around 87 million units. This new development in China could prompt another revision lower, however. Knowing this — and being generally worried about supply-demand dynamics this holiday shopping season — a number of AAPL stock traders are promptly selling shares today.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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