Analysts working at Piper Sadler have come up with their forecast about Apple Inc., which is a listed company on the NASDAQ exchange. According to them, the sales estimates for the APPLE will be low due to the COVID-19 restrictions in China.
One of the biggest iPhone factories is actually located in China - So any lockdowns in the country also mean that iPhone production will also be impacted. That's the main reason why the analysts have come up with a downward revision for the 4th quarter that will be ending in December.
According to Piper Sadler's analysis, the revenue for the 4th quarter will be close to $119 billion as compared to the earlier forecast of $127.3 billion. In addition, the expected iPhone sales will be somewhere around 74 million as compared to the expectation of 83 million.
iPhone Production Is Down By 50%
As things stand right now, around 50% of the iPhones are assembled in the Foxconn plant located in China. During November, the output of the said plant decreased even below 50%, which means far fewer iPhones are being assembled.
In addition, the services and manufacturing activities in China also shrunk during November. In fact, they are at a seven-month low, which tells us that the zero COVID policy adopted by China is severely affected the economy. On top of that, virus infections are also rising in mainland China which will affect the economy even in 2023.
The situation in China also got heated due to labor unrest on a large scale. In the case of Apple, the workers of Foxconn actually clashed with the security forces!
All of this means more production problems for Apple - If fewer iPhones are being made, it will automatically mean fewer sales for Apple as well!
To solve the problem, Apple will prioritize the production of the iPhone 14 Pro over other iPhone models since it is the one with the highest selling price. At least, that's what the Piper Sadler brokerage house believes will happen!