Apple Expects Lower iPhone 14 Shipments Due to China Plant Problems

Apple expects lower iPhone 14 shipments this holiday season, due to problems at a China plant. A plant in Zhengzhou has experienced trouble recently, forcing the company to suspend production there. The resulting longer lead time will result in lower iPhone shipments, Apple said.

According to a report from Credit Suisse, Apple’s iPhone shipments will be pushed to later quarters, leaving the holiday season to remain steady. The company’s sales are expected to increase two per cent in the current quarter, to $73 billion. The company relies heavily on Chinese contract electronics manufacturer Foxconn to manufacture its iPhones. The Chinese company accounts for 70 per cent of Apple’s iPhone shipments. Its largest iPhone production plant is in Zhengzhou, in the eastern province of Henan.

The Foxconn facility in Zhengzhou is struggling with a COVID outbreak since mid-October. It has affected migrant workers and forced authorities to impose a seven-day lockdown in the surrounding area. The lockdown is putting a huge strain on Apple and Foxconn. It also highlights the effects of China’s zero-COVID policy on international business. Several top global companies have experienced disruptions in recent weeks as a result of the plant’s problems.

The situation is particularly worrying for Apple, which has a market capitalisation of $2.2 trillion. Its shares rose following its late October earnings report, but the stock has been struggling more since. Last week, the company’s shares recorded their worst weekly performance since March 2020.

The company has declined to give the exact number of infected workers. However, it said it was working to resume full production at Zhengzhou as soon as possible. It has also implemented measures to prevent the spread of the virus, including restricting movement between the dormitories and the factory area.