Apple will lose 6 million iPhone Pros due to unrest at the Chinese factory
Upheaval at Apple Inc.’s key production center in Zhengzhou is likely to result in a production shortfall of around 6 million iPhone Pro units this year. This is reported by Bloomberg with reference to a source familiar with the situation.
The situation at the plant remains volatile and estimates of lost production may change. Much will depend on how quickly Foxconn Technology Group, the Taiwanese company that runs the plant, can get people back on the assembly lines after violent protests against Covid-related restrictions. If quarantine restrictions continue in the coming weeks, production could fall further.
The campus in Zhengzhou has been wracked by lockouts and worker unrest for weeks as the local government struggles to contain the Covid outbreak. Thousands of workers fled the factory in October after chronic food shortages, only to be replaced by new workers who rebelled against pay and quarantine measures.
Why is Apple here?
The Foxconn factory produces the vast majority of iPhone 14 Pro and Pro Max devices, Apple’s most popular phones in 2022. These premium phones filled the gap in demand for the regular iPhone 14 models. Apple lowered their overall production plan to around 87 million units from an earlier forecast of 90 million units.
Apple and Foxconn have raised their estimates of production shortfalls in Zhengzhou over the past two weeks amid mounting disruptions. They expect to be able to make up 6 million units of lost production in 2023.
This shows that everyone, even Apple, is susceptible to supply chain constraints in China due to Covid, said Anschel Sag of Moor Insights & Strategy.
Analysts at Morgan Stanley earlier this month estimated a shortfall of about 6 million units of the iPhone Pro model this year, although that was before the outbreak of violence in Zhengzhou last week.
Protests in China
The coronavirus continues to spread in China, against the background of which the authorities continue to lock residents in their homes. Restrictions are also introduced in production. Yes, workers were locked out at the Foxconn factory.
The corresponding decision could have caused deaths. Outraged citizens protest demanding the resignation of Xi Jinping. China itself defends his policy. Moreover, it is considered life-saving and necessary to avoid overloading the health care system. Officials have vowed to continue the restrictions, even as public tensions mount.
