Apple has warned its suppliers of a potential drop in demand for iPhone 13
Apple has warned its supplie...
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Apple has warned its suppliers of a potential drop in demand for iPhone 13

2 December 2021
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2 min.
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Apple has warned its suppliers of a potential drop in demand for iPhone 13

Demand for iPhone 13

Apple (AAPL) shares were down 2% at the premarket on Thursday amid news that the company told its parts suppliers that demand for the iPhone 13 range had slowed, as reported by Bloomberg. This poses a risk that expectations for the biggest holiday quarter in Apple's history may not materialise.

Apple (AAPL) shares, up 33.4 per cent in the last six months and up 3.2 per cent on Tuesday (when stock indices were down 1.55 per cent to 1.9 per cent), fell 2 per cent at Thursday's pre-market.

The fall came amid reports that Apple has warned suppliers that production increases in 2022 may not be forthcoming, according to anonymous Bloomberg sources.

Apple has already cut its iPhone 13 production plan for this year by as much as 10 million units from its target of 90 million due to a shortage of parts, according to the report.

The news could exacerbate investor worries that the shortage issues will weaken the company's sales more than previously expected.

Thus, commenting on the report for the 4th fiscal quarter ended 30 September, CEO Tim Cook said that product supply constraints have reduced Apple's sales by about $6 billion.

In addition, the company is facing a worsening macro environment prices for consumers are rising due to high inflation, there is growing concern about the new COVID Omicron strain, in addition some customers are not willing to wait for the long delivery of the new iPhone 13 and may prefer alternatives or wait for the updated models in 2022.

Although Apple executives did not give exact numbers when talking about the December quarter, the company expected this holiday season to be the biggest in terms of revenue in Apple's history.

However, weak sales at TSM, Apple's main chip supplier, in October (down 12% compared to September) and a disappointing forecast by Hon Hai Precision Industry, the main iPhone assembly company, for the current quarter add to the pessimism.

Analysts' view

Whatever the case with Apple's iPhone sales this festive quarter, market analysts are extolling the company's current position, calling its stock one of the best choices in "turbulent times" in the stock market.

Wedbush analyst Dan Ives pointed out that, judging by retailers and supply chain data, domestic demand for iPhones over Thanksgiving weekend was "robust".
 

Persons2 and Companies4 in the news

Managing Director at Wedbush Securities
1 place
CEO of Apple
2 place
Apple
3 place
Bloomberg L.P.
4 place
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