Why Apple Stock Was Rising When the Market Opened This Morning


Apple Stock (NASDAQ:AAPL)

Apple stock opened Tuesday’s trading session up 2.6%, but the Apple stock eventually gave up some of those gains. Apple’s stock has fallen 14% this year as investors flee from the company amid concerns about the economy and rising interest rates.

Reports from China indicated that the iPhone 14 Pro was in high demand. Still, demand for less expensive devices was relatively weak. Read on to find out how it may affect Apple’s bottom line.

What’s the Reason?

Foxconn Technology Group, the Chinese company responsible for manufacturing iPhones, reportedly switched production Monday night from the cheaper regular iPhone 14 to the more expensive Pro versions. While Apple stock investors should always exercise caution when relying on supply chain reports, this one might be legitimate given that it mirrors claims of rising demand for the new iPhones in the United States.

Over a week ago, when the iPhone 14 initially came out, Apple (NASDAQ:AAPL) website indicated lengthier wait times for the high-end Pro versions than for the basic devices. Even though the Pro edition quickly sold out, many retailers still had ample supplies of the cheaper variants.

What’s Next?

The increased interest in the more expensive Pro versions may help Apple’s (NASDAQ:AAPL) bottom line. Still, it’s possible that iPhone 14 sales may be lower than expected. According to Edison Lee, an analyst at Jefferies, iPhone 14 sales in China are down 10.5% compared to sales of the iPhone 13.

During Apple’s (NASDAQ:AAPL) fiscal third quarter, which concluded in June, the company’s active installed base of devices reached historic heights across all product categories, including the iPhone, which contributed to the company’s record revenue. Until this most recent quarter, it did not seem that rising prices discouraged Apple consumers from purchasing new iPhones. However, management pointed to a decline in digital advertising for services and product lines.

Although it is too soon to tell whether the iPhone 14 is well received by consumers, Apple does not need to increase iPhone revenue to succeed. However, it must continue expanding its installed base of devices since doing so often generates more revenues from applications and other high-margin services.

Featured Image-  Megapixl @ Wachiwit

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.