Apple (NASDAQ:AAPL) shares fell nearly 1% in premarket trading on Monday as investment firm JP Morgan lowered its iPhone shipment forecast for the upcoming December quarter, citing the recent disruption in China.
Analyst Samik Chatterjee lowered his iPhone 14 estimates by 5 million and other iPhone estimates by 3 million and now expects iPhone and total revenue to decline year over year over the period. .
“Regarding the impact on [fiscal year 2023] overall estimates, the reduction in estimates is more modest as we expect some of the December quarter’s shipment shortfall to be made up in the March quarter, which typically being a lower production quarter will give Apple plenty of opportunities to recover the shortfall, and on the demand side, based on historical precedents, we expect limited to modest impact on consumer demand due to delays and extended delivery times,” Chatterjee wrote.
The analyst added that investor sentiment on Apple (AAPL) is expected to remain “contested” in the near term in the absence of additional visibility on the December quarter deficit, but the limited impact on demand from the iPhone 14 lineup could offer long-term investors “several opportunities to interesting buying in equities until year-end.”
Last week, Apple (AAPL) said it would invest $450 million to power the new Emergency SOS system available on the iPhone 14.