Yahoo Finance Live anchors discuss the slowdown in shipments for Apple’s iPhone 14 Pro Max and Max Pro models amid China’s COVID lockdowns.
BRIAN SOZZI: Here are three things you need to know right now. Shares of Apple seeing big interest on the Apple finance ticker pages after the tech giant announced a slowdown in shipments of the iPhone 14 Pro and iPhone 14 Pro Max due to China lockdowns impacting operations.
The shutdown at the world's largest iPhone plant is expected to cause further disruptions, and customers will experience some longer wait times to receive their new products. Brad, I saw this news cross late last night, thought we'd wake up here, futures' would be down 500 points on the Dow. That is not happening, clearly. And Wall Street is willing to, I think, look beyond this.
A lot of notes that I've been reading out this morning-- Samik Chatterjee, he's been on with us. He's over JP Morgan-- leaving their estimates unchanged for this current quarter. The vibe appears to be, while this is a near-term setback for Apple, demand for these phones continue to be strong and will likely stay strong throughout this cycle of iPhones.
BRAD SMITH: And I'm looking at the statement here from Apple as well. They continue to see strong demand, as you were mentioning a moment ago, from the iPhone 14 Pro and the iPhone 14 Pro Max suggesting that consumers might still be opting up to some of the higher end cameras, some of the higher end functionality, or at least of this slate of products that have come out for this year.
It does have a larger question for, what is that actual supercycle-- what's that next supercycle like for Apple if you see consumers who are looking across the product suite right now and whether it be Apple or whether it be the Google Pixel or Samsung's products on a smartphone perspective, that smartphone demand is something that has been cited.
Waning smartphone demand, at least this year, has been something that's cited by even the chip-makers that we heard from last week too. And so with that in mind, where does that continue to impact even a company like Apple on the demand side for some of their products? And could we hear more about some of the pulling back, at least in the near-term production levels from these major tech companies?
BRIAN SOZZI: Right. And it's not just an Apple thing. When you think of China, COVID lockdowns, it's a Tesla thing. Of course, they're a main player in the China market. If Apple is having these problems, obviously, they're not using the same plans. But these lockdowns are impacting Apple or Tesla, you name it across the board.
And you have to wonder, are just estimates too high for a lot of these companies that are overly reliant on China here? You look at Tesla, Apple, I'll even toss Starbucks into the mix. They reported last week as well, quarter wasn't that great in China because of these lockdowns. It is a broader, broader issue. Investors, I think, really need to drill down back into these companies to understand the China exposure.
BRAD SMITH: Could impact a company in Nike as well, one in the region where we've seen the propensity to continue to produce not just on the production side, but then also on how you're selling into these markets. China, amazingly critical. And Goldman Sachs actually noted this morning in the note over the weekend that the actual reopening is still months away. And so what does that look like in terms of the--
BRIAN SOZZI: Months?
BRAD SMITH: --very companies that we're looking like? Months. Yes, exactly. And elderly vaccination rates, they pointed that out. But case fatality rates appear high among the unvaccinated population in the region.
BRIAN SOZZI: That's an interesting note. I read part of it, Brad. And I will say that goes against or flies in the face every reason why the market rallied in October and into November. It was really partially on this view China would reopen, we would get reaccelerating growth rates out of the country. And that note, I think, really just pokes a lot of holes in it.