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Apple (AAPL) Planning to Lower iPhone & AirPods Production
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Apple (AAPL - Free Report) is lowering its production plans for iPhone SEs and AirPods by 20%, which is about 2 million to 3 million units, per Nikkei Asia. An increase in iPhone SE price by $30 despite the lack of a design upgrade in the model is expected to reduce demand for the product, which is a concern for the iPhone maker.
Production of the premium models like the iPhone 13 is anticipated to be reduced by a couple of millions due to weaker-than-expected demand for the product. The company is expected to reduce AirPods production by 10 million units.
Nevertheless, the Zacks Rank #2 (Buy) stock has risen 0.8% in the year-to-date period. The company is expected to report earnings of $1.43 per share, suggesting an improvement of 2.14%.
Falling Demand Compels Apple to Reduce Production Output
Apple launched the upgraded iPhone SE as the first 5G-capable budget phone less than three weeks ago. However, the company is expected to reduce production to minimize the level of inventories due to lower demand for the product.
Rising inflation and the Russia-Ukraine war have impacted the demand for different Apple products. The ongoing conflict has also compounded the year-long chip shortage, hindering various industries ranging from PCs to smartphones.
Numerous governments like the United States, EU, Japan, Korea have imposed economic sanctions on Russia, which has led to the rise in prices of oil, energy and raw materials and, in turn, escalated people’s living costs.
Apple has halted its production in Russia, where it had a 16% market share last year. COVID-19 lockdowns in China have resulted in a surge in inflation globally, aggravating Apple’s woes as it led to falling demand for products.
Certain Apple suppliers like Qorvo (QRVO - Free Report) have been negatively hit as well following the news of the iPhone maker curtailing production.
In the year-to-date period, Qorvo shares have fallen 15.7% compared with the Zacks Semiconductors - Radio Frequency industry’s decline of 13.5%.
Other Stocks to Consider
Amid the rising geopolitical tensions and impending inflation, the global markets are in a volatile situation. However, one can consider these stocks in the broader Computer and Technology sector for their portfolio for a better return.
Image: Bigstock
Apple (AAPL) Planning to Lower iPhone & AirPods Production
Apple (AAPL - Free Report) is lowering its production plans for iPhone SEs and AirPods by 20%, which is about 2 million to 3 million units, per Nikkei Asia. An increase in iPhone SE price by $30 despite the lack of a design upgrade in the model is expected to reduce demand for the product, which is a concern for the iPhone maker.
Production of the premium models like the iPhone 13 is anticipated to be reduced by a couple of millions due to weaker-than-expected demand for the product. The company is expected to reduce AirPods production by 10 million units.
Nevertheless, the Zacks Rank #2 (Buy) stock has risen 0.8% in the year-to-date period. The company is expected to report earnings of $1.43 per share, suggesting an improvement of 2.14%.
The Zacks Computer-Mini Computers industry and the Zacks Computer and Technology sector have declined 1.1% and 9.7%, respectively.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Falling Demand Compels Apple to Reduce Production Output
Apple launched the upgraded iPhone SE as the first 5G-capable budget phone less than three weeks ago. However, the company is expected to reduce production to minimize the level of inventories due to lower demand for the product.
Rising inflation and the Russia-Ukraine war have impacted the demand for different Apple products. The ongoing conflict has also compounded the year-long chip shortage, hindering various industries ranging from PCs to smartphones.
Numerous governments like the United States, EU, Japan, Korea have imposed economic sanctions on Russia, which has led to the rise in prices of oil, energy and raw materials and, in turn, escalated people’s living costs.
Apple has halted its production in Russia, where it had a 16% market share last year. COVID-19 lockdowns in China have resulted in a surge in inflation globally, aggravating Apple’s woes as it led to falling demand for products.
Certain Apple suppliers like Qorvo (QRVO - Free Report) have been negatively hit as well following the news of the iPhone maker curtailing production.
In the year-to-date period, Qorvo shares have fallen 15.7% compared with the Zacks Semiconductors - Radio Frequency industry’s decline of 13.5%.
Other Stocks to Consider
Amid the rising geopolitical tensions and impending inflation, the global markets are in a volatile situation. However, one can consider these stocks in the broader Computer and Technology sector for their portfolio for a better return.
Advanced Micro Devices (AMD - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the year-to-date period, AMD’s shares have fallen 14.3% compared with the Zacks Electronics - Semiconductors’ decline of 9.8%.
ASGN (ASGN - Free Report) carries a Zacks Rank #2.
ASGN shares have fallen 3.5% in the year-to-date period, compared with the Zacks Computers - IT Services industry’s decline of 14.1%.