China’s Covid Lockdowns Will Hit Apple ‘Pretty Hard’

China’s covid crisis is expected to have a significant impact on Apple’s  (AAPL) - Get Free Report iPhone shipments heading into the key holiday season.

Full Video Transcript Below:

J.D. DURKIN: What is China's COVID crisis doing to Apple's iPhone supply? Foxconn front and center, Martin what do we know?

MARTIN BACCARDAX: Yeah, it's going to hit it pretty hard. The estimation now is that iPhone 14, at least the high end models, the production from that factory in central China could be hit by as many as 6 million units as a result of the disruption. And it's important to remember that these disruptions all largely predated what we saw over the weekend in terms of protests in Shanghai and Beijing. Workers at this Foxconn factory have been sort of demonstrating against working conditions, against pay, and against broader COVID restrictions for a number of weeks now.

And it's been a slow drip of bad news for Apple supply chain as a result. But the numbers we're seeing, 6 million on the iPhone 14 will have an impact. There's no question about it, for the holiday quarter sales for Apple, they'll probably recapture it again in 2023 because demand hasn't changed. It's merely going to be an issue of supply. But nonetheless, this will trickle down to some of the electronics retailers. And there's no question it's going to be a headline sales impact for Apple. And that's probably why you've seen I think the stock is off about 6.5% over the past month as a result of the reporting that ourselves and others have done on this.