Apple Stock Falls 3% Amid Reports of Weakening Demand

By Senad Karaahmetovic

Apple’s stock declined by over 3% on Tuesday following a report from Nikkei Asia indicating that the company has informed its suppliers to anticipate lower demand for certain hardware products in the first quarter.

The tech giant has reportedly instructed its suppliers in Asia to reduce shipments of components for AirPods, the Apple Watch, and MacBooks. A manager at one of Apple’s suppliers commented, “Apple has alerted us to lower orders for almost all product lines since the quarter ending December, partly due to weak demand. The supply chain in China continues to struggle with recent abrupt policy changes, which have led to labor shortages because of significant COVID surges.”

In a related development, reports surfaced that Foxconn, a major Apple supplier, is nearing full production capacity at its key iPhone factory in Zhengzhou after enduring weeks of severe disruptions. The COVID-19 outbreak in China, which began in late October, caused a labor shortage for Foxconn, leading the company to offer employee bonuses as high as CNY 14,000 (approximately $2,013). Additionally, some workers staged strikes over pay-related issues.

Today, BNP Paribas Exane downgraded Apple’s stock and lowered its price target, citing reduced estimates for earnings per share and iPhone deliveries. The brokerage now projects that Apple will deliver 224 million iPhone units in 2023.