Apple: COVID Lockdowns in China Will Slow iPhone Shipments

By: James Flippin · November 08, 2022 · Reading Time: 3 minutes

Juice Worth the Squeeze?

The broader impact of COVID-19 lockdowns in China has been widespread, with everything from EV production to Chinese tech stocks feeling the squeeze. Even major American companies like Starbucks (SBUX) have said China’s lockdowns have hurt their business.

Apple (AAPL), due to its heavy reliance on China-based manufacturers for iPhone production, has also been affected. That was further evidenced this past weekend, when Apple announced it would be slow shipping on iPhone 14 Pro and Pro Max smartphones due to COVID restrictions at a plant in Zhengzhou, China. Amid what the company refers to as “significantly reduced” output, Apple says it is working to ramp production levels back up without sacrificing health or safety concerns.

Apple Didn’t Spoil the Bunch

It’s been a challenging year for the tech sector, with large losses from Big Tech stocks contributing to the market’s 2022 decline. That said, the rally observed in the second half of 2020 and all of 2021 was largely fueled by those same stocks.

While Apple has been caught up in this year’s sell-off, with its share price slumping nearly 25% year to date, it has fared relatively well throughout the downturn. Analysts note Apple enjoyed a meteoric rise during the most recent bull market while avoiding a total plummet within the current macroeconomic environment. In fact, Apple’s market capitalization exceeded the combined value of Google parent Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META) at one point last week.

High-End on Hold

For consumers, the connection between Apple’s announcement and the shopping experience is clear: certain iPhone models are going to be harder to find. The company’s Sunday release noted demand is already strong for both the iPhone 14 Pro and Pro Max models — and the impending scarcity will make for some frustrated consumers.

With wait times bound to increase, the clock is ticking for those who plan on buying or gifting an iPhone 14 Pro or Pro Max this holiday season. And, for those invested in the stock, the wait time before Apple returns to its bull market glory may have also just increased.

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