Shares of Apple fell more than 4% at the start of trading on Wednesday, after a report that the tech giant was abandoning plans to boost production of the latest iPhone fueled concerns about demand.
In a report, Bloomberg earlier reported that Apple had told its suppliers to scale back efforts to ramp up production of its iPhone 14 lineup by as much as 6 million units in the second half of the year due to disappointing demand.
Shares of the world’s most valuable public company opened at a two-month low of $147.64 and were the biggest drag on the Dow on Wall Street.
“Weaker consumer demand is expected when utility bills rise, interest rates rise, mortgage costs … discretionary spending will be reduced by that,” said Patrick Armstrong, chief investment officer. of Plurimi Wealth in London.
Analysts said the Pro and Pro Max versions of the iPhone 14 were selling at a brisk pace, though demand for the base model, usually the best-seller, was disappointing.
Aside from satellite connectivity and fault detection features, the iPhone 14 model looks and feels similar to its previous iteration, though it retails for $100 more at $799 for the base version. Pro models, starting at $999, come with more recent upgrades.
Potential iPhone 14 buyers may opt for the iPhone 13, given the deep discount on the previous model, said Abhilash Kumar of data analytics firm Strategy Analytics.
Wedbush analysts said the product mix has shifted considerably towards Pro, leading to lead times in early November for some models, and that Apple could shift production of the base model to Pro across Asia before the launch. Christmas season.
Shares of Apple suppliers Qualcomm, Taiwan Semiconductor, STMicroelectronics, Infineon and ASML were also trading lower on the reports.