Apple finally lowers iPhone 14 shipment forecast... Impact of Foxconn factory lockdown in China

iPhone 14 series.

[Asia Economy Reporter Lee Ji-eun] Apple has announced that the waiting time for customers to receive new products will be longer than expected due to a decrease in iPhone 14 shipments. This is because production was disrupted after Chinese authorities locked down Foxconn's factory in Changzhou, the world's largest iPhone production base.

On the 6th (local time), according to Bloomberg, Apple released a statement on its website saying, "Demand for the iPhone 14 Pro and iPhone 14 Pro Max is increasing, but shipments are lower than initially expected, so the waiting time to receive new products is expected to be longer."

Apple further explained that the shipment decrease was caused by the lockdown of Foxconn's factory in Zhengzhou, Henan Province, China. Apple stated, "Currently, the facility (Foxconn factory) is operating at a significantly reduced capacity," and added, "We are working closely with our suppliers to return shipments to normal levels while ensuring the health and safety of all workers."

Accordingly, the iPhone 14 Pro is expected to be delivered by late November or early December.

Earlier, Zhengzhou city locked down the Foxconn factory, where 300,000 workers are employed, from the 19th of last month to prevent the spread of COVID-19. This factory is a major Apple plant producing the iPhone 14 Pro and iPhone 14 Pro Max, manufacturing 80% of the iPhone 14 series and more than 85% of the Pro models.

[Image source=Yonhap News]

Bloomberg reported, "Zhengzhou city ordered a ban on the movement of people and vehicles except for essential reasons such as medical needs," and explained, "Apple is in a situation where it needs to increase production ahead of the Christmas season but is expected to face difficulties in securing necessary personnel and parts." The Foxconn factory is currently operating only part of its production facilities, isolated from outside contact.

Initially, Apple's fourth-quarter shipment target was known to be around 80 million units, but due to the Foxconn factory lockdown, it is forecasted that 2 to 3 million units may be cut from the target. Moreover, due to China's 'zero-COVID' policy, there is a possibility that first-quarter shipments next year could decrease by about 20% from the original forecast. On the 3rd, Taiwanese market research firm TrendForce analyzed, "Apple's first-quarter iPhone shipments next year were expected to be 52 million units, but they could decrease by 4 to 5 million units."

Bloomberg observed that Apple's growth could slow due to the shipment decrease impact amid weaker-than-expected iPhone sales in China. With the economy in recession and hiring frozen temporarily in all departments except research and development (R&D), production disruptions could directly hit revenue generation.

Bloomberg explained, "Apple has maintained the revenue securing approach adopted during the early stages of the COVID-19 pandemic," but added, "Currently, many job hirings have been halted, which means Apple is adjusting its existing plans to cut next year's budget."

This content was produced with the assistance of AI translation services.