“We believe that many stores are now in shortage of iPhone 14 Proup to 25% -30% below than would be normal, which is not a good sign for the Christmas season. China’s zero covid policy is a punch in the stomach to Apple’s supply chain“, warned daniel ivesdirector of analysis of Webbush Securities in an interview on CNBC. According to his forecasts, the technology company will have sold 2 million fewer iPhones, or 14% than expected, on this Black Friday, due to the shortage.
On the other hand, the Iphone 14 Pro and Pro Max devices are the most requested this year but the company was forced to reduce production (from 90 million units to 87 million).
According to Evercore, a scenario in which the Foxconn plant in China operates at 50% capacity for 7 or 14 days would have an impact of up to 6 billion dollars less revenue in the current quarter (December-March). The point is, the plant is on track for its third week in a row with below-normal activity and the situation will not be resolved before the end of November either, Reuters reported.
For Apple, the production of the iPhone is a critical problem that it has dealt with on other occasions but until now it had not coincided with the peak sales season for the product, which accounts for around half of the company’s direct revenue globally.
The escalation of interest rates and debt yields has drastically lowered the multiples at which shares are valued. The economic slowdown and inflation have hit the business prospects of most technology companies. Apple, however, has been almost immune to all of this to date. Now the experts see a crisis that uncovers its great Achilles heel: the model of manufacturing the iPhone in China and exporting it from there to the rest of the world.
Source: Ambito
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