Morgan Stanley cuts production estimates for Apple’s new iPhone

Morgan Stanley is trimming its forecast for iPhone shipments by 3 million amid slower production in China due to its zero-COVID policies.

Video transcript

DAVE BRIGGS: All right, my play is Apple. Shares moving down today. Morgan Stanley cutting iPhone shipment estimates by another 3 million units, accounting for that slower China production. Analysts had previously cut 6 million shipments in November, which brings the current forecast down nearly 10 million to around 75 and 1/2 million. The holiday season typically makes this Apple's biggest quarter. Morgan Stanley estimates that with 3% hit to revenue because of all this.

Meanwhile, another development for Apple in the positive, planning to significantly expand its data encryption practices, as it expands iPhone privacy protection. And it is an optional system. And they do call it advanced data protection. You can opt into that. Shares of Apple down about 2% on the day, down 22% year to date. It's been a rough go, given all those China lockdowns.

SEANA SMITH: It certainly has been. Apple clearly very much affected by the China lockdowns, affected by the recent protests at their Foxconn plant. When we also put this into dollar terms, I know Morgan Stanley was estimating 3% to 4% hit in revenue. Dan Ives saying that it's costing Apple a billion dollars a week in lost iPhone sales when you take into account all the protests, the stoppage there at a very, very important plant.

This could be a rough couple of months ahead for Apple. We know the holiday season is so critical, so much emphasis on iPhone sales, in particular, during the November and December months. So a huge step back here. It's pretty worrisome here to a lot of these shareholders.

PRAS SUBRAMANIAN: Yeah, you know, these China-- reopening is sort of happening there. But at the same time, we're seeing closures in other areas. We've seen that in the auto world, with Volkswagen, for instance, shut down a plant, even though we're seeing people sort of opening up other cities. So for Apple, it's a big, big deal.

DAVE BRIGGS: Tesla's had some issues there as well.

SEANA SMITH: They certainly have. Certainly, supply chain issues alive, unfortunately.