iPhone 14

Apple Increases iPhone 14 China Production Due to COVID-19 Restriction

Apple said on Sunday that consumers will have to wait longer to get their new items. Due to substantial production restrictions at a big factory in China that impacted the COVID-19 regulations, Apple expected for Sunday fewer deliveries of high-end iPhone 14 models than it previously anticipated.

In specifying how much manufacturing has been affected, Apple stated in a statement that “the facility is now working at severely reduced capacity.”

“iPhone 14 Pro & iPhone 14 Pro Max versions are still in high demand. However, compared to what we had previously predicted, we now anticipate fewer shipments of the iPhone 14 Pro & iPhone 14 Pro Max “It said.

According to Reuters’ report last month, tightened COVID-19 regulations in China could force the output of Apple’s iPhones to decline by as much as 30% in November at one of the largest plants in the world.

As more employees flee the site, its flagship Zhengzhou facility in central China, which employs nearly 200,000 workers, has already been shaken by unrest over stringent efforts to prevent the spread of COVID-19.

Due to the problems at the Zhengzhou plant, market research company TrendForce said last week that it has reduced its forecast for iPhone shipments for the December quarter through 2-3 million units, from 80 million previously. It also added that after looking into the situation, it discovered that the factory’s capacity utilization rates have been now around 70%. Customer wait times for new products will be longer, according to Apple, which began selling the latest iPhones in September.

Quincy Krosby, the chief global strategist of LPL Financial in Charlotte, North Carolina, stated: “Anything which affects Apple’s production definitely affects their share price.” “But, this is only a small part of a much bigger tale, which is the economic uncertainty in China. These headlines are a part of an ongoing debate over whether the persistent reports that officials are debating whether to eliminate some restrictions during the first quarter are true.”

A day after health officials declared they were maintaining tough coronavirus bans, China on Sunday reported the largest number of fresh COVID-19 cases in six months, possibly disappointing recent market hopes for an easing.

Cuts on Foxconn’s outlook

The Zhengzhou factory’s operator, Taiwan’s Foxconn, said on Monday that it was working to get the plant back to full production as quickly as feasible and cut down the fourth quarter outlook.

It said that it would put new controls into place at the facility to stop the spread of COVID-19, including a system that limits industrial workers’ freedom of movement. In an effort to put more pressure also on Apple suppliers as it struggles to calm worker unrest at the base, China placed a seven-day lockdown on an industrial park including the iPhone factory on Wednesday.

A Zhengzhou Airport Economic Zone in central China declared that it will immediately implement “silent management” measures, including prohibiting all inhabitants from leaving their homes and only permitting approved vehicles on its roads.

The province government of Henan, whose Zhengzhou is located, “has made it plain that it would, as ever, fully support Foxconn in Henan,” it world’s largest contract electronics company Foxconn said in a statement.

Foxconn is currently collaborating with the government in an organized attempt to stop the pandemic and soon resume production at full capacity.

Foxconn, formerly known as Hon Hai Precision, produces 70% of all iPhone shipments worldwide, making it Apple’s top iPhone manufacturer. Other, smaller industrial facilities are located in southern China and India.

Foxconn stated that, in light of the events in Zhengzhou, this will “revise down” its outlook for the fourth quarter, which it had previously “cautiously optimistically” planned for.

As they compete to provide smartphones, tablets, and other devices for the year-end Christmas season in Western markets, Taiwan’s tech companies often have their strongest quarter in the fourth quarter. On November 10, Foxconn will present its third quarter reports.