Apple believes China’s COVID-19 restrictions damaged iPhone supplies

Apple believes China’s COVID-19 restrictions damaged iPhone supplies

As a result of anti-virus restrictions imposed on a contractor’s plant in central China, Apple is informing customers that they will have to wait longer for its newest iPhone models.

Foxconn’s facility in the central Chinese city of Zhengzhou is “working at a drastically reduced capacity,” according to a statement sent by the company on Sunday.

The business stated that it now anticipates lower iPhone 14 Pro and iPhone 14 Pro Max shipments than it had previously projected. Customers will encounter lengthier delivery delays for new products.

Foxconn Technology Group stated earlier that it had implemented anti-virus procedures at the Zhengzhou site in response to virus outbreaks. Apple and Foxconn had not previously replied to inquiries over the potential impact on iPhone production. A week ago, entry to the industrial zone where the factory is located was prohibited due to an increase in diseases in Zhengzhou and the evacuation of manufacturing employees.

The shutdown is anticipated to cause additional problems at the plant, which in recent weeks has experienced an outbreak of coronavirus illnesses and a mass departure of workers, some of whom fled on foot.

“Face punch”

Wedbush analysts wrote in a research, “After facing macro headwinds and delivering a great September quarter/guidance in stark contrast to the rest of Big Tech, this latest zero COVID situation is an utter gut punch for Apple in its most crucial holiday quarter.”

They continued, “If Zhengzhou continues to operate at a lesser capacity over the next few weeks, this will produce iPhone Pro shortages throughout the crucial Christmas season, especially in the United States.”

Due to the shutdown, Foxconn stated in a statement that it is lowering its outlook for this quarter downward.

“Foxconn is now collaborating with the authorities to eradicate the epidemic and soon resume production at full capacity,” the business announced on Monday.

In addition, the provincial government has stated that it will “completely help” Foxconn in handling the plant’s pandemic prevention and operating situation, according to the report.

Sunday on the Zhengzhou plant’s WeChat account, the firm said that a “closed loop” system would restrict employees’ movement between their dorms and the manufacturing area in order to mitigate COVID-19 transmission hazards.

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Companies such as Foxconn often experience a hectic fourth quarter as they ramp up production in anticipation of the Christmas season.

Apple stated, “We are working closely with our supplier to bring production levels to normal while guaranteeing the health and safety of every worker.”

While other large technology companies have struggled this year due to the slowing economy, Apple has demonstrated greater resilience. Its fourth-quarter revenue increased by 8% year-over-year to $90.1 billion, while its profits increased by nearly 1% to $20.72 billion.

 

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