IPhone shipments for Q1 cut by 3 million more units: Morgan Stanley
source link: https://www.cnbc.com/2022/12/07/iphone-shipments-for-q1-cut-by-another-3-million-units-morgan-stanley.html
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Morgan Stanley cuts iPhone shipment estimate by 3 million more units
- Morgan Stanley analysts reduced their Apple iPhone shipment forecast by an additional 3 million units Wednesday to account for slower production in China for the December quarter.
- The analysts had previously cut 6 million shipments in November, bringing the current forecast down from 85 million to around 75.5 million units.
In this article
Morgan Stanley reduced its Apple iPhone shipment forecast for the December quarter by an additional 3 million units on Wednesday to account for slower production in China. The firm had already cut shipment expectations by 6 million units in November.
Morgan Stanley now expects Apple to ship around 75.5 million units, down from its original forecast of 85 million units. It comes as Apple suppliers face turmoil in China.
Last month, factory employees clashed with security personnel at the Zhengzhou plant in China, the world’s largest iPhone factory, run by Apple’s assembly partner Foxconn. The factory was also hit by a Covid-19 outbreak in October that caused workers to flee the facility as the company moved to control the outbreak by isolating infected people.
Morgan Stanley analysts said the unrest will impact what is historically Apple’s biggest quarter, which is bolstered by the holiday shopping season. The analysts expect Apple will report about $120 billion in December quarter revenue, resulting in a 3% impact from the slower production. Apple reported $123.9 billion in its first fiscal quarter this year, up 11% over 2021.
Shares of Apple were down around 1% early Wednesday.
Despite the expected dip in shipments and revenue, the analysts said the forecast does not necessarily reflect slowing demand.
“By now it’s well understood by investors that the Dec Q will be challenged due to iPhone supply shortages, and therefore the most important near-term debate is really how much of the lost demand from December is perishable vs. deferrable,” they wrote in a Wednesday note.
“We believe demand for the iPhone 14 Pro/Pro Max remains solid, supporting the view that lost demand in December is more likely to be deferred into March than destroyed.”
Apple did not immediately respond to requests for comment.
— CNBC’s Michael Bloom contributed to this report.
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