Home » Apple warns of hit to iPhone shipments from China COVID disruptions

Apple warns of hit to iPhone shipments from China COVID disruptions

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Ben Blanchard and Jaibeer Shekhawat

Taipei -Apple Inc. on Sunday expected shipments of its high-end iPhone 14 models to fall below previous expectations. COVID-19 limit.

“Facility is currently operating at significantly reduced capacity,” Apple said in a statement, without elaborating on the impact on production.

“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we expect iPhone 14 Pro and iPhone 14 Pro Max shipments to be lower than we had previously expected.

Reuters reported last month that iPhone production at Apple, one of the world’s largest factories, could fall by up to 30% due to tightening in November. COVID-19 Chinese Curb.

Central China’s main Zhengzhou factory, which employs about 200,000 people, is reeling from frustrations over draconian measures to curb the spread of the virus. COVID-19, many workers fled the scene.

Market research firm TrendForce said last week that it had lowered its forecast for iPhone shipments in the December quarter by two to three million units, down from an earlier estimate of 80 million units, due to troubles at its Zhengzhou factory. Currently, the utilization rate was about 70%.

Apple, which began selling its new iPhones in September, says customers will have to wait longer to receive their new products.

“Anything that affects Apple’s output will obviously affect the stock,” said Quincy Crosby, Apple’s chief global strategist. LPL A financial institution in Charlotte, North Carolina.

“But this is part of the deeper story, the uncertainty surrounding the future of China’s economy…These headlines suggest that some measures will be lifted in the first quarter.”

China reported highest number of new infections on Sunday COVID-19 infections in six months, a day after health officials said they were sticking to strict controls on the coronavirus, which may have disappointed recent investors’ hopes for easing.

FOX CONNcutOutlook

Taiwan’s Foxconn, the operator of the Zhengzhou plant, said on Monday it was working to resume full production at the plant as soon as possible, lowering its outlook for the fourth quarter.

He said the factory would implement new measures to curb the spread of the virus. COVID-19 includes a system to limit the movement of factory workers.

China ordered an industrial park housing iPhone factories to begin a seven-day lockdown on Wednesday. The move is a move to increase pressure on Apple’s suppliers, who are desperate to assuage workers’ grievances at the base.

Central China’s Zhengzhou Airport Economic Zone said it would immediately implement “silent management” measures, including curbing all residents and allowing only approved vehicles on roads within the region.

Foxconn, the world’s largest contract electronics manufacturer, said in a statement that the Henan provincial government, where Zhengzhou is located, “as usual, made it clear that it will fully support Foxconn in Henan.”

“Foxconn is now working with the government to eradicate the pandemic and resume production at full capacity as soon as possible.”

Foxconn, formerly known as Hon Hai Precision Industry Co Ltd, is Apple’s largest iPhone maker, accounting for 70% of global iPhone shipments. We also have smaller production bases in India and Southern China.

Foxconn has previously shown “cautious optimism” for the fourth quarter, but said it was “downgrading” its outlook given the events in Zhengzhou.

The fourth quarter is traditionally a hot season as Taiwanese tech companies compete to supply mobile phones, tablets and other electronic devices for the holiday season in western markets.

Foxconn will announce its third quarter earnings on November 10th.

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