Apple (AAPL) - Get Apple Inc. (AAPL) Report shares moved lower in pre-market trading Wednesday amid reports that the tech giant may need to cut production of its signature iPhone 13 as result of the global semiconductor shortage.
Bloomberg News reported that Apple could slash production by as much as 10 million units , taking the overall end-of-year total to around 80 million units, as a result of delays from major supplies such as Broadcom (AVGO) - Get Broadcom Inc. Report and Texas Instruments (TXN) - Get Texas Instruments Incorporated Report.
Apple launched its new iPhone 13 last month with a base price of $799, while unveiling higher-priced versions including the iPhone 13 Pro and iPhone 13 Max,
Credit Suisse noted earlier this week that wait times for the new handsets "remain extended across the board" and include the longest gap between order and delivery for at least four years.
"We’d highlight that while wait times are a rough proxy for initial demand, the metric is only one of many variables impacting iPhone sell-through; supply availability is a key unknown, particularly this year," said Credit Suisse analyst Mathew Cabral, who carries a 'neutral' rating with a $150 price target on the stock.
Apple shares were marked 1.14% lower in early trading to change hands at $139.90 each, a move that would trim the stock's six-month gain to around 4%.
Apple said after its July earnings update that supply constraints would likely hit both the iPhone and the iPad in terms of sales, as a shortage in global semiconductors blunts its ability to meet "jaw-dropping" consumer demand. The hit will trim a bit more than $3 billion from September quarter revenues, Apple said, modestly higher than the impact it forecast for the prior period.
Apple will publish its fiscal fourth quarter earnings on October 28