Bad news as the holiday season approaches.
“Customers will have to wait longer to receive their new products,” Apple said in a statement late Sunday.
Deliveries of the iPhone 14 Pro will be "lower than expected" after the confinement of a factory in China linked to anti-Covid restrictions, the American group has warned.
Apple said the main iPhone production site in Zhengzhou (central China) "is currently operating with significantly reduced capacity" since the discovery of a cluster of positive Covid-19 cases.
“As we have done since the start of the pandemic, we are prioritizing the health and safety of workers in our supply chain,” adds the apple brand.
Lower forecasts
The Taiwanese group Foxconn, Apple's main subcontractor, has been facing an increase in Covid-19 cases since October at its huge site in Zhengzhou, the largest iPhone factory in the world.
Foxconn announced in a press release to expect worse than expected results for the end of the year.
Read alsoThe largest idle iPhone factory in China: should we fear a shortage?
“The group's outlook for the fourth quarter was initially
cautiously optimistic
but due to the pandemic affecting some of our activities in Zhengzhou, the company will revise this outlook downwards,” the Taiwanese company said.
"Foxconn is now working with authorities in a joint effort against the pandemic, to resume production at full capacity as soon as possible," he added.
The company did not specify the extent of the impact of the containment on its financial results.
It will publish its results for the third quarter on Thursday and will hold a telephone meeting with investors on this occasion.
Foxconn has also announced on the social network WeChat new measures for its employees, in particular a “sanitary bubble” between the dormitories and the factory.
Employees who continue to work will be grouped in three dormitories, the group said.
Employees who fled
First confined, hundreds of employees exasperated by their living conditions fled the factory in disaster last week.
Other Foxconn production sites, not confined, are temporarily requested elsewhere in China, in particular in the province of Guangdong (south), the manufacturing base of the country, according to Ivan Lam, analyst for the specialized firm Counterpoint.
"However, ramping up production takes time" and the overall output won't be on target anyway, he points out.
According to calculations by the specialized firm TrendForce, Apple will produce 2 to 3 million fewer iPhones this quarter due to the epidemic rebound in Zhengzhou, out of an estimated target of 80 million.
"All of this confirms Wall Street's fears about Apple for this quarter, and will be a burden this week for technology stocks," said analyst Dan Ives of US investment firm Wedbush Securities.
5,643 new cases on Monday
The apple brand depends a lot on China, where it has more than 90% of its products manufactured.
The country is also one of its most important markets.
Unlike its neighbors in Silicon Valley, Apple has so far weathered the economic crisis well, even as the strong dollar weighs on its revenue.
From July to September, the American group saw sales of the iPhone, its flagship product, increase by 9.7% over one year, to 42.6 billion dollars.
For the holidays, the company and experts expected strong demand for the iPhone 14 and 14 Pro Max.
Foxconn is the largest private-sector employer in China, with more than one million people working at its approximately 30 factories and research facilities in the country.
Located about 600 km from Beijing, the Zhengzhou site employs up to 300,000 people who live there year-round, in “iPhone City”, a sort of city within the city.
China is pursuing a strict strategy against Covid.
Despite recent rumors of a possible easing, the authorities assured on Saturday that they would "unwaveringly" stick to the zero Covid policy.
The number of cases has been on the rise in recent weeks, with 5,643 new cases announced on Monday, a six-month high.
