Apple Stock Loses Ground As China Covid Protests Threaten IPhone Output And Elon Musk Rips Tech Giant For “Censorship” In Its Treatment Of Twitter
29.11.2022 - 01:43
/ deadline.com
Apple stock fell 3% today as it was hit by two headwinds — protests in China threatening iPhone production and claims of “censorship” lodged by new Twitter owner Elon Musk.
The more material challenge, at least in the near term, concerns the company’s all-important iPhone production pipeline, which has been hurt by protests across China against the country’s extreme, “zero-Covid” measures. Some accounts have describe the actions as the largest public anti-government demonstrations since the student uprisings in Tienanmen Square in 1989. Disruptions at Apple factories related to the protests could cut the output of iPhones by several million devices, just as the company heads into the home stretch of the holiday-season fourth quarter.
Daniel Ives, an analyst with Wedbush Securities, wrote in a note to clients that Apple is “essentially caught in the crossfire heading into the all-important Christmas time period.” He estimates that up to 10% of Apple’s projected number of iPhone units could fail to materialize amid the protests at Foxconn factories. Inventory is off as much as 40% in many Apple stores, he noted, though the long-term viability of the hardware production arm of Apple remains intact as he sees it. Still, about 52% of the company’s $365 billion in total revenue in 2021 came from iPhone sales, so any disturbance to the production flow is a significant event.
Also today, Musk repeatedly ripped Apple in a blitz of tweets and replies, saying the tech company has threatened to remove Twitter (which Musk acquired last month) from its App Store, “but won’t tell us why.” Musk decried the threats as “censorship,” aiming to mobilize his 119 million followers on Twitter to take up his cause against Apple.
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