Apple Tells Suppliers To Build Fewer Components For AirPods, Apple Watch And MacBook As Shares Sink To 52-Week Low: What You Need To Know

Apple Inc AAPL shares slid into the end of 2022 on supply chain concerns. New reports indicate the tech giant's problems have leaked into 2023, suggesting the Cupertino-based company could continue to face an uphill battle in the near term. 

What To Know: According to a Nikkei report, China's supply chain is in disarray amid ongoing changes to COVID-19 protocols. As a result, Apple has told multiple suppliers to build fewer AirPod, Apple Watch and MacBook components in the first quarter, citing weakening demand.

"Apple has alerted us to lower orders for almost all product lines actually since the quarter ending December, partly because the demand is not that strong," a manager at one of Apple's suppliers reportedly told Nikkei.

"The supply chain in China is still trying to cope with the latest abrupt policy turns, which brought a shortage of laborers because of the sharp COVID surges," the manager added.

In early December, China lifted some of its COVID-19 restrictions following a series of nationwide protests over extreme lockdown measures. China-based stocks surged on the news, but now the country is attempting to manage higher infection rates. 

Check This Out: Loup's Gene Munster Explains The Slide In Apple Shares: 'It's As Simple As That'

Why It Matters: Several other stocks could face selling pressure if Apple is seeing a softening of demand. Apple purchases a variety of components from Foxconn, or Hon Hai Precision Industry Co Ltd HNHPF.

Several Apple products are also powered by Qualcomm Inc QCOM, Taiwan Semiconductor Manufacturing Co TSM and Skyworks Solutions Inc SWKS chips.

Some competitors could also be impacted, including Samsung Electronics Co Ltd SSNNF and Fossil Group Inc FOSL.

AAPL Price Action: Apple is making new 52-week lows on Tuesday.

The stock was down 3.39% at $125.52 at time of publication, according to Benzinga Pro.

Photo: courtesy of Apple.