Apple shares drop following Foxconn crisis

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Apple shares fell about 2.6% on Monday, making it one of the Nasdaq 100 index’s biggest percentage losers, weighing on the broader market as growing unrest at a key Chinese plant spread fears of a bigger hit to already limited production of higher-end iPhone 14 models due to unrest at a Foxconn factory in China.

The upheaval at Apple’s key manufacturing hub of Zhengzhou is not only causing a drop in Apple shares, but it is also expected to result in a production shortfall of close to 6 million iPhone Pro units this year.

According to Wedbush Securities, Apple could lose volume due to production disruptions in the first quarter, with at least 5% of units affected and potentially up to 10%.

The unrest at Foxconn coincides with Chinese protests against the country’s zero-Covid policy. Covid-19 cases have increased in mainland China, prompting residential lockdowns and business closures in a number of major cities. Protests have erupted across the country in response to the lockdowns, including at the Foxconn iPhone assembly plant in Zhengzhou.

Apple shares fell 3.4% in November, while the Nasdaq Composite index gained 2%.

The sources for this piece include an article in Reuters.

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