This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Shares of Apple (NASDAQ: AAPL) tumbled today after a Bloomberg report said that the company is walking back plans to boost iPhone production.
This news worried Apple shareholders, sending the tech stock down by 1.27% as of market close.
So what
Apple had originally told its suppliers to prepare for increased production as it anticipated higher demand for its latest iPhone 14 models. But some of that demand for Apple’s entry-level iPhone 14 models never materialized, according to sources speaking to Bloomberg.
Now, Apple is expected to cut back on its production by about 6 million phones. That would put the company’s production of its latest models at about 90 million units in the second half of this year, which is about the same number of new iPhones it produced over the same period last year.
The pullback in iPhone production is apparently the result of higher-than-expected demand for the iPhone 14 Pro/Max models and lower-than-expected demand for Apple’s entry-level iPhone 14 models.
Now what
While Apple investors are reacting strongly to this news today, they should also keep in mind that in early August, a separate Bloomberg article said that Apple was asking its suppliers to produce 90 million units of its new models. So while the company was recently anticipating a surge of demand that didn’t happen, it doesn’t change what the company had originally expected a little more than a month ago.
Apple shareholders may be extra cautious about this news as the Federal Reserve continues to hike interest rates at an aggressive pace and investors worry that the Fed’s move could end up tipping the economy into a recession.
But long-term investors should keep in mind that a temporary pullback in iPhone production isn’t a good reason to dump Apple’s stock.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
The post Why the Apple share price slumped today appeared first on The Motley Fool Australia.
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More reading
- Why Apple stock climbed today
- Why Apple stock rallied Monday
- This stock market investment strategy made money 100% of the time over the last century
- Why is everyone talking about Apple stock?
- Should you really buy Apple stock?
Chris Neiger has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
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