Apple flags hit to iPhone shipments from Covid-19 disruptions in China

CUPERTINO, California – Apple on Sunday said it expects lower iPhone 14 Pro and iPhone Pro Max shipments than previously anticipated, as Covid-19 restrictions temporarily

disrupt production at an assembly facility in Zhengzhou, China.

“The facility is currently operating at significantly reduced capacity. Customers will experience longer wait times to receive their new products,” the company said in a statement.

The abrupt move by the Chinese government on Wednesday to lock down the area that includes the Hon Hai Precision Industry plant until Nov 9 is expected to further disrupt a factory already grappling with an on-site coronavirus outbreak, worker exodus and enforced quarantine.

Hon Hai said it is lowering its fourth-quarter outlook to factor in the lockdown.

The local government has ordered people and vehicles off the streets, except for medical or other essential reasons, a prohibition that threatens to cut off the flow of additional workers and components needed to rev up production ahead of the holiday season crush.

The measures may further compound the headaches that Apple and Taiwan’s Foxconn, the biggest iPhone supplier, are already facing as iPhone sales slow in China.

Apple, the world’s most valuable company, said in October that it expects growth to decelerate in the current period. It did not provide a specific revenue forecast for the current quarter, continuing an approach it adopted at the start of the Covid-19 pandemic.

But analysts estimate sales of about US$128 billion (S$180 billion), which would be an all-time record.

In the face of slowing growth,

Apple has paused hiring

for many jobs outside of those in research and development, an escalation of an existing plan to reduce budgets heading into 2023, Bloomberg reported last week, citing people with knowledge of the matter. BLOOMBERG, REUTERS