Apple Inc (AAPL.O) shares plunged more than 4% on Wednesday after a report that the tech giant was scrapping its plans to increase production of the latest iPhone 14 stoked demand worries. Bloomberg previously reported that Apple had told its suppliers to stop efforts to boost the assembly of its iPhone 14 lineup by as many as 6 million units in the second half of this year on poor demand.
Shares of the world’s most valuable public company opened at a two-month low of $147.64 and were the greatest drag on the blue-chip Dow Jones Industrial Average Index (.DJI).
Patrick Armstrong, chief investment officer at Plurimi Wealth in London, said:
“Weaker consumer demand is to be expected when utility bills are going up, interest rates are going up, and mortgage costs are going higher … discretionary spending is going to be curtailed by that.”
Analysts said iPhone 14’s Pro and Pro Max versions were selling at a fast pace, although demand for the base model, usually Apple’s best-seller, was disappointing.
Aside from crash detection and satellite connectivity features, the iPhone 14 model appears and feels similar to its previous iteration, although it goes for $100 more at $799 for the base version. The Pro models, which begin at $999, come with more recent upgrades.
Potential iPhone 14 buyers may go for iPhone 13, given the huge discount on the older model, said Abhilash Kumar of data research firm Strategy Analytics.
Wedbush analysts said the product mix has largely shifted toward pro, pushing wait times into early November for some models, and that Apple could be changing production from the base model to Pro across Asia ahead of the holiday season.
Buy Crypto NowShares of Apple suppliers Qualcomm (QCOM.O), STMicroelectronics, Taiwan Semiconductor, ASML (ASML.AS), and Infineon (IFXGn.DE) were also trading lower on the news.
