Apple CEO Tim Cook speaks on stage during day 2 of Vox Media’s 2022 Rule Conference in Beverly Hills, California.
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Barclays recently cut its Apple price target from $144 a share to $133 a share, noting that it is concerned that Apple The service is estimated to be “at risk.”
The company lowered its revenue estimate by 7% for the quarter due to slowing services growth, manufacturing problems and weakening demand.
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“What started as spurred production cuts has turned to weak demand across product categories,” they wrote in a note Tuesday. “We are also concerned about a slowdown in Services growth.”
Apple has been struggling with iPhone 14 Pro shipments during the holiday season because of Covid restrictions on its main factory in China. Investors are also wary of rising interest rates and waning consumer confidence, which could weigh on demand for Apple’s high-priced products.
Shares of Apple were up less than 1% early Wednesday morning.
In October, the world’s largest iPhone factory in Zhengzhou, China, was Covid outbreak. Taiwanese company Foxconn, run the factory, impose lockdown restrictions. Factory lateraffected by worker protests over wage dispute in November, and many employees have left.
Foxconn tried entice workers back with bonusesand Reuters reported that Foxconn’s Zhengzhou factory is Almost back to full production.
China has its Covid-free policy reverse course because it looks like it will reopen the economy. Beijing’s policy involves strict lockdowns and mass testing to try to control the virus. Now, there are Covid-19 outbreaks across large parts of the country, which could affect demand for iPhones.
Apple also faces potential demand problems.
“The main challenge is expected to lie on the demand side, especially as resilient premium consumers may have already started shifting their spending towards travel while some may shift their focus to medical supplies. The shift in spending will pose a key short-term challenge,” said Will Wong, research director at IDC, told CNBC.
An Apple representative did not immediately respond to a request for comment.
–CNBC Michael Bloom and Arjun Kharpal contributed to this report
