Apple (AAPL) Set to Shift Some MacBook Production to Vietnam
Apple AAPL continues to diversify its production base for its devices to reduce dependence on China. Per the latest report from Nikkei Asia, the iPhone maker is set to produce part of its MacBooks in Vietnam beginning as early as May 2023.
Apple has been suffering from supply-chain issues along with restrictions in China due to the country’s zero-COVID policies that have disrupted production in Shanghai and Zhengzhou, Foxconn’s largest iPhone production plant.
In November, Apple warned of shipment delays of its premium iPhone 14 Pro and 14 Pro Max for the holiday season, citing pandemic-related labor shortages in Zhengzhou.
Vietnam, along with India, has evolved as the preferred production base for Apple devices. Vietnam already produces AirPods, some iPads and Apple Watch. Apple partner Foxconn has started manufacturing iPhone 14 in the Sriperumbudur facility near Chennai.
India is expected to become a major production hub for Apple by 2025. According to JP Morgan analysts, Apple will move 5% of global iPhone 14 production to India by late 2022 and will manufacture 25% of all iPhones in India by 2025.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
With some MacBook production moving out to Vietnam, Apple will now have a second production base for all its devices along with China. The company is also expected to move some AirPods and Beats earphone production to India.
Apple shares have declined 25.5% year to date compared with the Zacks Computer & Technology sector’s fall of 35.9%.
Apple Mac Prospects Not so Bright in 2023
Apple’s Mac is expected to suffer from lower PC demand in 2023. However, Mac’s growth rate is expected to outperform market leaders Lenovo LNVGY, HP HPQ and Dell DELL, similar to third-quarter 2022.
Per IDC data, global shipments totaled 74.3 million units during the third quarter of 2022, down 15% due to sluggish demand and uneven supply. According to Gartner data, PC shipments were 68 million, down 19.5%.
However, both the IDC and the Gartner report highlighted that Apple gained market share compared with Lenovo, HP and Dell.
Per IDC, in the third quarter, Lenovo and HP both lost market share. Apple and Asus both gained market share. While Lenovo’s market share came down to 22.7% from 23.1% in the year-ago quarter, HP’s market share was 17.1% compared with the year-ago quarter’s 20.2%.
Meanwhile, Apple’s share increased from the year-ago quarter’s 8.2% to 13.5%. In terms of PC shipments, Apple gained 40.2% year over year, while Lenovo, HP and Dell were down 16.1%, 27.8% and 21.2%, respectively.
Per Gartner, Apple’s market share increased from the year-ago quarter’s 8.1% to 8.5%.
Apple reported Mac sales of $11.51 billion, up 25.4% from the year-ago quarter and accounted for 12.8% of total fiscal fourth-quarter sales. The figure beat the consensus mark by 27.73%.
For the first quarter of fiscal 2023, Apple expects Mac sales to be negatively impacted by forex. This Zacks Rank #3 (Hold) company expects Mac revenues to decline substantially year over year during the December quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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