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.
Gene Munster doesn’t see it as a threat
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.
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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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