Apple relies on the iPhone for more than half of its revenue.
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shares fell after it was reported that it will produce fewer iPhones this year than many analysts predict.
(ticker: AAPL) is asking suppliers to make about 220 million iPhones this year, about the same as in 2021, according to a Bloomberg report. The industry had expected the company to increase output to about 240 million phones.
Shares fell 1% in premarket trading Thursday. The drop contrasts with other big name tech stocks that are showing a slight recovery.
(AMZN) shares were up 1.5% and Google parent
(GOOG) was up 0.7%.
The report confirms worries that manufacturing problems in China, which has endured strict lockdowns to prevent the spread of Covid-19 this year, and the outlook for softer consumer spending, will dent the company’s earnings. Apple generates more than half its revenue from the sale of smartphones and the stock is down more than 20% this year.
The production plans show that Apple isn’t immune from the worsening economic backdrop as consumers scale back purchases this year in the face of rising interest rates, and the fastest inflation in 40 years.
Apple didn’t respond to an emailed request for comment.
In a separate report, The Wall Street Journal said that Apple is increasing pay for workers, including boosting hourly wages and starting salaries. The company is facing labor unrest from retail workers pushing to unionize and engineers unhappy with plans for returning to the office.
Another report by Nikkei Asia said that the development schedule for the iPhone 14, expected to be a major upgrade announced this fall, has been hurt by shutdowns in China.
Apple benefited from investments in computers when the pandemic hit as companies shifted to remote work. This year it lost its perch as the world’s most valuable company to state-backed oil producer Saudi Aramco.
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