Piper Sandler cuts estimates for Apple’s Dec quarter as China worries mount
(Reuters) – Analysts at Piper Sandler on Thursday cut their revenue and iPhone sales estimates for Apple Inc’s December quarter, as Beijing’s strict lockdowns crimp production at the world’s biggest iPhone factory in Zhengzhou, China.
The brokerage now expects $119 billon in revenue for the current quarter from an earlier projection of $127.3 billion, with iPhone unit sales of about 74 million against 83 million previously expected.
“More than 50% of assembled iPhones come from Foxconn’s Zhengzhou plant. Majority of the disruptions took place in the month of November where utilization for the plant may have fallen to 50% or below,” the analysts said.
China’s manufacturing and services activities shrank further in November to seven-month lows, official data showed, stung by the country’s zero-COVID policy and rising infections that analysts said will hurt the economy well into 2023.
Production woes for Apple were heightened by a rare example of large-scale labour unrest in China, where Foxconn workers clashed with security personnel in Zhengzhou.
Apple might prioritize iPhone 14 Pro production over other models, the brokerage said, given the higher average selling price for the product.
(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila)