Apple has begun telling some of its contract manufacturers that it was looking to India and Vietnam to boost production, seeking to reduce its dependence on China as Beijing’s strict anti-Covid policy has caused supply-chain bottlenecks, The Wall Street Journal reported.
The Journal reported Saturday that Foxconn,
the top manufacturer of the iPhone, and Wistron, another assembler, already have set up factories in India to make iPhones mainly for the country’s domestic market. Barron’s reported last month how Foxconn has been facing supply and demand problems due to ongoing macro issues.
China is Apple’s second-largest consumer market. The company warned in late April that supply constraints would cause a hit of $4 billion to $8 billion in its fiscal third quarter. Apple Chief Financial Officer Luca Maestri said Covid-related shutdowns were having some impact on customer demand in China.
A season for Apple (ticker: AAPL) declined to comment for the Journal. Barron’s sent an email to Apple on Saturday asking the company to comment on the report but has yet to receive a reply.
Apple shares have declined 22.5% this year. The stock has fallen for eight straight weeks.
Analyst Dan Ives at Wedbush said Friday that iPhone supply-chain checks in Asia have been “surprisingly resilient” despite the “zero-Covid driven demand issues” for Apple in China.
“As of now, we believe iPhone demand is holding up better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector) and are trending better than management’s guidance thus far in the quarter,” Ives said in a research note Friday.
Apple, Ives said, remains Wedbush’s favorite tech name. The firm reiterated its Outperform rating on the stock and a $200 price target “with these recent checks giving us further confidence in the iPhone cycle into 2023.”
Write to Joe Woelfel at [email protected]
Credit: www.marketwatch.com /