Apple (AAPL) shares moved sharply lower Wednesday following a report that suggested the world's biggest tech company will scrap plans to boost iPhone production amid fading consumer demand.
Bloomberg reported that Apple has instructed suppliers and assemblers to pare back plans to boost production of the newly-launched iPhone 14 by as many as 6 million units, opting instead to chase a target of 90 million -- roughly in-line with last year's tally and its early summer forecast -- for the second half of this year.
Last month, A cautious outlook from its main assembler, Foxonn, had raised concerns over waning smartphone demand over the second half of the year.
Foxconn said at the time that is sees current-quarter smartphone revenues coming in flat to last year, citing "geopolitics, inflationary pressure and the Covid pandemic", with support from solid demand in its cloud and networking products divisions. Apple typically accounts for around half of Taiwan-based Foxconn's annual revenue.
Last week, Apple unveiled plans to boost App Store prices in Europe and Asia after launching its news suite of iPhone 14s, which were priced at a base of $799 -- the same levels as last year's iPhone 13 for U.S. customers.
Apple shares were marked 4% lower in early Wednesday trading to change hands at $145.64 each, a move that would extend the stock's six-month decline to around 17%.
Apple declined to provide detailed September quarter revenue guidance following its better-than-expected third quarter earnings in late July, but said overall revenue growth would likely outpace gains over the three months ending in June.
Apple said solid China demand, as well as a muted supply chain hit, helped iPhone revenues rise 2.8% from last year to $40.67 billion over the June quarter, just ahead of the $40.5 billion Street forecast.
Overall, Apple earned more than $19.44 billion for its fiscal third quarter, as revenues rose 2% from last year to $82.96 billion, just ahead of analysts' estimates of $82.88 billion.
