Fewer iPhones for Christmas sales? This is behind Apple’s China problem

In the midst of the important Christmas business, Apple is grappling with significant delivery issues for the new iPhone 14 Pro. Production at the main factory in China is currently affected by Covid restrictions, Apple said. The plant operates with significantly reduced emissions. This means longer waiting times for customers.

Which Apple supplier are you talking about?

Taiwanese contract manufacturer Foxconn’s factory in Zhengzhou has been hit by the regional government’s corona lockdowns. The factory is at least partially operational, as some workers do not leave the premises. However, the restrictions can also interrupt the flow of components to the factory.

Apple said it is working with the manufacturer to return production to normal without endangering workers’ health.

Why is that important?

Apple traditionally does its biggest business in the Christmas quarters – and usually even displaces Samsung from the top spot in the smartphone market. Both the iPhone 14 Pro and the larger iPhone 14 Pro Max are affected by the bottlenecks, Apple said.

The models only came on the market in September together with the iPhone 14. Apple this year has equipped the more expensive Pro versions with significantly better cameras than the base models and with additional software functions – and according to market researchers they are correspondingly popular. The demand is unbroken, Apple emphasizes.

The supply problems should also affect the company’s figures. Given the strong dollar, the group had increased prices significantly in Europe in some cases.

How well are the new iPhones selling?

Shortly after the release of the new iPhone models, Apple is said to have delayed production due to a lack of demand.

The group, based in Cupertino, California, has informed its suppliers that it will no longer increase production rates by up to six million units in the second half of the year, it said.

Instead, the group plans 90 million units of the product line around the iPhone 14, which is the same number as in the same period last year, the report said. This would allow Apple to return to its original prediction starting this summer.

How was last year?

In the 2021 Christmas market, Apple had another record quarter with profits up more than 20 percent to $34.6 billion. Turnover rose by about 11 percent to $123.9 billion, also a new record.

The iPhone group braved the global component bottlenecks that were slowing down the industry at the time. The iPhone was again the largest source of sales at $71.6 billion. Apple did not provide a forecast for the current quarter, but analysts expect sales to rise.

sources

(dsc/t online)