Apple Inc (NASDAQ: AAPL) is trading down on Monday as investors scramble to evaluate the impact of recent protests at its key iPhone production plant in China.
Munster’s take on the China situation
Anonymous sources told Bloomberg this morning that the pandemic-related restrictions and now these protests together could result in the production of iPhone Pro to be down by close to 6 million units this year.
Still, Loup Ventures’ Gene Munster does not see it as much of a threat for Apple Inc. On CNBC’s “Squawk Box”, he said:
There’s a history of when these supply chain issues have hit Apple production, that they’ve missed numbers or it’s been a negative impact in the quarter – in the subsequent quarter, they typically get those sales back.
For the year, Apple stock is now down more than 20%.
Apple is lowering its reliance on China
Munster agreed that keeping the majority of production in China over the long-term could be a significant headwind. But he remains bullish as Apple Inc is already committed to trimming its reliance on the authoritarian state.
Apple is making measurable moves to diversify away [from China]. We just got the 2021 supplier list and just over 50% of Apple’s revenue comes from products produced in China. It’s down from the low 60s in 2020.
Munster expects that descent to continue as more than 80% of the new manufacturers that Apple has recently disclosed are “not” located in China.
Earlier in 2022, he said the Apple stock would be worth $250 over the next couple of years (read more).
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