Apple Inc. said shipments of its newest premium iPhones will be lower than previously expected after China lockdowns affected operations at a supplier’s factory.
The company continues to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models but the lockdowns mean “customers will experience longer wait times to receive their new products,” Apple said in a statement Sunday. Deliveries of iPhone 14 Pro handsets are currently listed for late November or early December, according to Apple’s website.
The announcement will likely disappoint investors who were hoping China would lift its Covid restrictions in the near future. Chinese stock markets rose sharply on Friday on the back of rumours of an end to Covid lockdowns.
Beijing’s unyielding approach to arresting the spread of the virus has come at a huge economic cost. But the country’s leader Xi Jinping, who has personally endorsed the policy, has given no indication that it will ease soon.
The latest figures show the world’s second-largest economy struggling to cope with prolonged challenges posed by persistent Covid restrictions, a property slump and the risk of a global recession.
China trade figures released on Monday showed its imports and exports contracted unexpectedly in October. It is the first slump since May 2020. Outbound shipments for the month dropped 0.3% from a year earlier which is in stark contrast to a 5.7% gain in September. It was the worst performance since May 2020.
The country reported 5,643 new Covid infections on Sunday, its highest daily tally in six months. Zhengzhou, where the Foxconn factory is located, is the capital of Henan province in central China and is home to about 10 million people. It recorded 3,683 cases and 22 deaths on Monday.
Cases were also detected inside the factory, prompting a sudden shutdown that led to workers fleeing the premises. On Monday, the company started a recruitment drive at its Zhengzhou plant. It is offering workers who left the plant between 10 October and 5 November a one-time bonus of 500 yuan (US$69; GBP£60.88) if they return to work.
Foxconn, the world’s largest contract electronic maker, has revised down its fourth quarter outlook due to China’s Covid control measures. The fourth quarter is usually a busy time for the tech company as demand for electronics rises ahead of the year-end holiday season in the West.
The Taiwan-based company said they are working with the Henan provincial government “to stamp out the pandemic and resume production to its full capacity as quickly as possible”.
Foxconn, formally known as Hon Hai Precision Industry, accounts for 70% of iPhone shipments globally.
(Bloomberg News)
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