Apple: Quick Color -- Reports of supply chain issues stemming from China cause shares to tick lower
- Apple (AAPL -1%) is hitting a snag today after reports suggested iPhone production may dive by around 30% in November due to China's COVID policies.
- The issue stems from the Foxconn factory in China, where well over half of all iPhones are manufactured. If reports are correct, an already supply-constrained backdrop for AAPL would only intensify.
- Last week, AAPL initially saw its shares turn lower as investors digested iPhone sales missing analyst estimates, only to climb back and finish the day well in the green after CEO Tim Cook commented that supply was the primary issue as opposed to demand.
- Although supply constraints are a better situation than softening demand, AAPL could report its second-straight iPhone sales miss in Q1 (Dec) if it cannot keep pace with demand.
- Lastly, AAPL's China-related woes do not paint a pretty picture for many of its silicon suppliers, including SWKS, CRUS, AVGO, TSM, and QCOM, especially if production remains disrupted for an extended period.