by Ben Blanchard and Jaiveer Shekhawat
TAIPEI, Nov 7 (Reuters) – Apple is expecting lower-than-expected shipments of its iPhone 14 Pro as health restrictions heavily affect production at its subcontractor Foxconn’s mega-factory in Zhengzhou, China .
“The site is currently operating at a significantly reduced capacity,” Apple announced Sunday evening without giving a figure.
“We continue to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect iPhone 14 Pro and iPhone 14 Pro Max shipments to be lower than we had anticipated.” he added in a press release.
Reuters reported last Monday that iPhone production could drop 30% in November at the Zhengzhou plant, one of the world’s largest iPhone manufacturing sites.
The recent resumption of contamination by the coronavirus responsible for COVID-19 has led the Chinese authorities to toughen their measures to fight the epidemic, which affects the activity of companies established in the country, such as the Taiwanese Foxconn.
Some of the staff at the Zhengzhou plant, which employs around 200,000 people, however protested against these draconian travel restrictions and many workers fled the site on October 29 after complaining on social networks about their treatment.
Apple stock lost 1% in pre-market trading on Wall Street.
“Anything that affects Apple’s production obviously affects the stock price,” said Quincy Krosby, head of global strategy at LPL Financial. “But this is part of a much larger reality: uncertainty about the future of the Chinese economy.”
According to a report published on Monday, China recorded 5,496 new cases of local contamination by the SARS-CoV-2 coronavirus on Sunday, the highest number for six months, and the health authorities assured that the strict measures would be maintained.
Foxconn, the world’s top iPhone maker with 70% of global shipments, said it was working to restore production to Zhengzhou as soon as possible.
A person familiar with the situation told Reuters that the Taiwanese group hoped to achieve this during the second part of November.
(Reporting Ben Blanchard and Sarah Wu in Taipei, Caroline Valetkevitch in New York and Jaiveer Shekhawat and Akash Sriram in Bangalore; with Brenda Goh; writing by Miyoung Kim, French version Laetitia Volga, editing by Bertrand Boucey)