Analyst Ming-Chi Kuo says Apple could ship 15-20 million fewer iPhone Pro and iPhone Pro Max units than expected after lockdowns and protests by workers at iPhone assembly plants in China ‘Apple in China.
Analyst says there are ‘significant downside risks’ for Apple and iPhone after workers protested at Foxconn’s iPhone assembly plant in Zhengzhou over restrictions sparked by the Covid-19. He notes that market consensus was for Apple to ship 80-85 million units of the iPhone 14 Pro series in Q4 2022, up from 70-75 million, according to its current forecast.
“Zhengzhou iPhone factory production has been significantly affected by worker protests, so I have reduced Q4 2022 iPhone shipments by approximately 20% to 70-75 million units ( against the market consensus of 80-85 million units),” Ming-Chi Kuo wrote in a post on Medium.
Strong demand so far
Workers at the Zhengzhou iPhone factory clashed with police over working conditions last week as the company and local authorities imposed restrictions to contain rising Covid-19 cases at the factory . The Zhengzhou factory, operated by Foxconn, is responsible for manufacturing the majority of new iPhones. It employs around 200,000 people.
The analyst estimates that the Zhengzhou plant operated at around 20% capacity in November and expects it to reach 30-40% in December. It doesn’t expect mass shipments of iPhone 14 models to resume until “late December at the earliest.”
In the first week of November, Apple said it expects lower iPhone 14 Pro and iPhone 14 Pro Max shipments and longer lead times due to Covid-19 restrictions in the factory in Zhengzhou. Apple didn’t say how much shipments would be reduced, but Bloomberg reported at the time that Apple had cut its estimate from 90 million to 87 million. Apple noted that demand for both models remains strong.
A shortfall of nearly six million iPhone Pro units
Bloomberg reported on Monday that problems at the Zhengzhou plant will likely lead to a shortfall of nearly six million iPhone Pro units this year, according to a source familiar with assembly operations. According to this source, Apple plans to make up this shortfall in 2023.
Ming-Chi Kuo, however, believes that most of the demand for the iPhone 14 Pro models will disappear with the recession. He also estimates that Apple’s Q4 2022 revenue will be up to 30% lower than analysts’ forecasts due to the high price of the iPhone 14 Pro series, which starts at over $1,000. .
Apple’s website currently lists a four-week waiting period for both iPhone 14 Pro models. At the beginning of November, the waiting period was three to four weeks. After Apple’s announcement on expected delays, the wait time increased to four to five weeks.