Apple backtracks on iPhone production increase as demand not there

(Alliance News) - Shares in Apple were under pressure in New York on Wednesday, as the consumer electronics giant is reportedly seeing less sales of its new iPhone than expected.

Shares in Apple were down 2.7% in New York on Wednesday at USD147.66 each, adding to the 19% slump seen in 2022.

Bloomberg reported that Apple has decided to maintain production for iPhone 14 and not increase as expected given softer consumer demand.

"Clearly this negative news in light of an already shaky macro and jittery market will send shockwaves across the Street with investors concerned this is another shoe to drop in this dark market with golden child Apple front and centre," Wedbush said.

The Los Angeles-based investment firm said the move to not increase production - by about 6 million units - "overshadows" the underlying story for iPhone 14 Pro demand that is currently playing out in the field.

"iPhone Pro demand remains robust based on all data points we see across the US and China and is tilting towards a 85% to 90% mix for iPhone 14 versus about 65% with iPhone 13. This means much higher ASPs and a clear tailwind for Apple into FY23 at this pace," it continued.

Wedbush noted base model iPhone sales have "clearly been underwhelming" and "softer" than Apple expected, but did stress that Pro models for the 14 version are matching iPhone Pro 13 sales.

It added: "Our positive thesis on Apple remains unchanged and we are not wavering in our view the iPhone 14 Pro demand is robust and this will enable Apple to power through near-term macro headwinds much better than feared by the Street."

The lack of base model sales can be pinned on consumers not willing to pay up for a smartphone that is "pricey with minimal enhancements" from iPhone 13, Wedbush speculated.

Wedbush maintained its 'outperform' rating with a USD220 price target.

By Paul McGowan; [email protected]

Copyright 2022 Alliance News Limited. All Rights Reserved.