Yahoo Finance's Allie Garfinkle discusses news that Apple has asked suppliers to pull back production by up to 6 million units and what it signals about consumer demand ahead of the holiday season.
AKIKO FUJITA: Let's turn our attention to another major tech player. We're talking about Apple. Shares, they're down about 3 and 1/2% right now. This following a report that it is backtracking on plans to ramp up iPhone production this year. According to Bloomberg, Apple telling suppliers to pull back on production. And we've got Yahoo Finance's Allie Garfinkle here with that story. Allie, so much of Apple's revenue stream does weigh on this device alone. What are we hearing in terms of the demand after the big reveal?
ALLIE GARFINKLE: So it's important to say, Akiko, off the cuff, Apple is pulling back by about 6 million units. They're pulling back on plans to increase, right? And this is actually putting them back in line with last year's numbers roughly. And this is high stakes stuff. This is their hero product, right? About 52% of Apple revenue ties back to iPhone sales. And this is also an important cycle for Apple, right? Fall, preparing for the holidays, those product launches are appropriately timed.
But they're coming up against a lot of headwinds here, right? There are two, I think, main things to consider. The first is the consumer slowdown, right? We have-- you go across sectors, right? We have Walmart and Macy's for example, predicting a weaker Christmas season. So there's that piece of it. And then I think the other piece of it, too, is that it's a time of transition for iPhone demand. We've seen the Pro models be a lot more appealing to consumers in recent years.
AKIKO FUJITA: So let's talk about those Pro models. I mean, some would argue when you think about the whole line up here, that's kind of where you want things to be because that is your moneymaker. What kind of demand are we seeing on that front?
ALLIE GARFINKLE: Yeah, I mean, the thing this goes back to, Akiko, is though this headline looks bad for Apple, this is not a total loss. iPhone Pro demand is really robust in both China and the US. That's what analysts are saying. I've seen it across a bunch of different reports. And remember also, this is canceling a scheduled increase, which is-- which sounds a little funky, but remember, this puts us back with production numbers at roughly last year, still 90 million units. So not all bad news off the cuff.
AKIKO FUJITA: OK. Stock, though, taking a hit today, down about more than 3%.
ALLIE GARFINKLE: 3 and 1/2.
AKIKO FUJITA: Allie, Garfinkle, thanks so much for that.