Apple shares fell on Thursday due to concerns of low demand for its iPhone 13. The tech giant told suppliers that their orders for its next generation devices may not be as strong as expected going into the holiday season.
Tom Forte, analyst at DA Davidson, told Yahoo Finance Live on Thursday that concerns should be taken seriously. I do think it's a reflection of the very challenged supply chain. Forte notes orders for the iPhone Pro and Mac Pros still show a 1 -- 2 week delay on the company's website.
I think this is the consumer who is seeing that there are delays at the ports and not even interested in waiting for their product, but ultimately will upgrade. Apple had already cut its iPhone 13 production target for the year. The company warned about chip shortages that knocked out billions in potential revenue in its Q 4 earnings in October.
The constraints had around $6 billion revenue impact, mainly due to industry wide silicone shortages and COVID related manufacturing disruptions, Cook said during the company's last earnings report.
Apple shares fell by 4% at the opening of Thursday's session, the biggest drop since May. Some of the losses were paired with shares by mid-morning.
Apple was trading at all-time highs earlier this week. The stock closed at a new record Tuesday despite a larger market sell-off. Some analysts saw the company as a flight to safety trade amid volatility due to the Omicron variant and possible actions from the Federal Reserve to combat rising inflation.