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Wedbush analysts said in a note that Black Friday store checks show “major iPhone shortages across the board.”
The analysts, who have an Outperform rating and a $200 per share price target on Apple (NASDAQ:AAPL), said iPhone “shortages are accelerating” and were front and center across many retailers, Apple Stores, and online channels this morning.
“Based on our analysis, we believe iPhone 14 Pro shortages have gotten much worse over the last week with very low inventories across the board seen today. We believe many Apple Stores now have iPhone 14 Pro shortages based on model/color/storage of up to 25%-30% below normal heading into a typical December, which is not a good sign heading into holiday season for Cupertino,” the analysts wrote.
They noted that China’s zero COVID policy has been an “absolute body blow” to Apple’s supply chain, with the Foxconn (TW:2354) protests in Zhengzhou a “black eye for both Apple and Foxconn.” Ives added the reality means Apple is extremely limited in their options for the holiday season and is “at the mercy of China’s zero Covid policy,” which remains a very frustrating situation for the company as well as the Street.
“With demand remaining firm into holiday season, we would estimate this negatively impacting roughly 5% of iPhone sales this quarter based on impacted China production/supply issues. If Zhengzhou remains at lower capacity the next few weeks and continues to see the unrest build with workers, this would cause clear major iPhone Pro shortages into the all-important Christmas time period especially in the US. While not the news any bull wants to hear from Apple, its a supply issue and related to China’s zero Covid policy which is a very frustrating situation for Apple (and its investors) yet again, but not demand driven,” the analysts concluded.
Apple shares declined 2% Friday.
