JP Morgan Drops Apple, Qualcomm from Top Picks as Tech Demand Slows

The Apple Inc. logo is seen in the lobby of New York City's flagship Apple store January 18, 2011. (Reuters)
The Apple Inc. logo is seen in the lobby of New York City's flagship Apple store January 18, 2011. (Reuters)
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JP Morgan Drops Apple, Qualcomm from Top Picks as Tech Demand Slows

The Apple Inc. logo is seen in the lobby of New York City's flagship Apple store January 18, 2011. (Reuters)
The Apple Inc. logo is seen in the lobby of New York City's flagship Apple store January 18, 2011. (Reuters)

Slowing demand for smartphones is likely to hit growth at Apple and chipmaker Qualcomm, analysts at J.P. Morgan said on Friday as they dropped the companies from the list of most preferred stocks.

The removal from the brokerage's "Analyst Focus List" comes as analysts warn that fresh coronavirus lockdowns in China and rising cost of goods due to the Ukraine conflict could hurt smartphone demand in 2022.

Analyst Samik Chatterjee said a moderation in consumer spending would temper higher expectation from the recent iPhone SE launch, while a slowdown in gaming in China could weigh on Apple's services.

Apple is already planning to lower iPhone and AirPod production due to a demand slowdown, the Nikkei newspaper reported on Monday.

Qualcomm, meanwhile, will likely bear the brunt of weakness in the smartphone market for low- to mid-end Android handsets, Chatterjee said.

"There has been understandably a lot of noise around demand weakness across global tech, but we believe the macro weakness seeping through the sector will impact the consumer end-markets more materially," he said.

The brokerage still rates Apple and Qualcomm "overweight" - the equivalent of a "buy" rating - based on their longer-term potential.

J.P. Morgan said in an environment of slowing consumer demand it has added to its list network equipment companies Arista Networks and Ciena on hopes of a more resilient demand for telecom and cloud-related spending.



Apple Names Insider Sabih Khan as COO

The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
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Apple Names Insider Sabih Khan as COO

The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)

Apple on Tuesday named insider Sabih Khan as its chief operating officer, taking over from Jeff Williams, as part of a long-planned succession.

Khan, who has been with Apple for 30 years and is currently the senior vice president of operations, will take on the new role later this month, the iPhone maker said in a statement.

Before joining Apple's procurement group in 1995, he worked as an applications development engineer and key account technical leader at GE Plastics.

Williams will continue to report to CEO Tim Cook and oversee the company's design team and Apple Watch.

The design team will report directly to Cook after Williams retires late in the year.