Why Apple's Shares Are Declining Today

Following reports that Apple Inc. (NASDAQ: AAPL) intends to abandon plans to raise iPhone production this year, the company's shares are trading down on Wednesday morning.

Apple instructed suppliers to scale back plans to extend the iPhone 14 product line by as many as 6 million devices in the second half of this year, according to a Bloomberg story citing people familiar with the situation.

Prior to the release of the iPhone 14, Apple reportedly upped its sales outlook, and some of the company's suppliers reportedly started preparing for a 7% rise in orders.

According to the report, lower demand for the iPhone 14/14 Plus is likely offsetting the stronger-than-anticipated demand for the iPhone 14 Pro/Pro Max. Apple's new goal is to create 90 million iPhones in the second half of the year as a result.

The report is in line with expectations at the company, according to Morgan Stanley analysts.

"Lead times for the iPhone 14 Pro Max and Pro in the US are still lengthy at 4-5 weeks, ranking second and third, respectively, among all models introduced in the previous six years. However, the lead times for the iPhone 14 and 14 Plus are very short, at 2 days and 0 days, respectively.

The analytical group highlighted that the 90 million production estimate is consistent with its projection.

Morgan Stanley said. "However, it is still early in the iPhone 14 cycle, and the next 3 to 5 weeks will remain critical in determining the strength of the iPhone 14 cycle," the company added.

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