iPhone China Production Woes Could Take $3B Toll On Apple's Q1 Revenue — But Analyst Says 'Good News Is...'

The most recent China lockdowns have begun to bite Apple Inc. AAPL, with the company disclosing that shipments of iPhone 14 Pro and Pro Max would be lower than its previous expectations.

What Happened: The muted outlook follows disruptions at Hon Hai Precision Manufacturing Company Limited’s HNHPF Zhengzhou iPhone assembly plant following the COVID-19 curbs put in place to rein in a renewed outbreak.

See Also: Apple Lures China iPhone Customers With Deep Discounts But Sales Stutter Amid Domestic Weakness: Report

Weighing in on the development, Loup Funds’ Gene Munster said the two iPhone Pro models will likely account for 40% of iPhone revenue in the December quarter. If production is shut down for seven days and a limited resumption is allowed for another 14 days, a total of about two weeks of sales or about 15% of the Pro model revenue will likely be impacted in the quarter, Munster added.

This will likely shave off about $3 billion from Apple’s December quarter revenue, Munster estimates. This accounts for about 2-3% of the consensus revenue estimate of $127 billion, the venture capitalist said.

“Good news is they get most of it back in March,” Munster added.

Munster also said Apple’s China production exposure, which came down from 60-62% in 2020 to 52-55% in 2021, will likely pull back further to the 45-50% range in 2022.

Price Action: Apple closed Friday’s session down 0.19% at $138.38, according to Benzinga Pro data.

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