Apple Claims iPhone 14 Demand Remains Strong While It Deals With A Major Shipment Issue
While the demand for the new iPhone 14 Pro and Pro Max may be high, Apple says its supply has been lowered due to China's zero-Covid-19 policy. The Foxconn plant in Zhengzhou is currently operating at a "significantly reduced capacity," according to Apple.
Apple's latest family of iPhones has been selling well, especially its higher-end Pro and Pro Max versions. With the upcoming holiday season, the tech giant was probably hoping to add to its profit margin with even higher sales. But that will not be the case, as the plant in China that was expected to produce 80 million units between October and December, is now forecasting 2 to 3 million fewer units due to a massive Covid-19 outbreak in the country.
"We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models," Apple said in a recent statement. "However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated."
The factory in central China has seen a drastic reduction in its workforce, which typically is around 200,000, since many of its workers fled the site due to the country's harsh measures during a Covid-19 outbreak. Reuters reported last month that iPhone output could see as much as a 30% reduction at Foxconn's factory in November.
This will leave those wanting an iPhone 14 Pro or Pro Max with longer wait times in the coming months. It could also further impact sales for those who were hoping to make one of the high-end iPhones a Christmas present for a loved one.
"Anything that affects Apple's production obviously affects their share price," remarked Quincy Krosby, Chief Global Strategist at LPL Financial, in an interview with Reuters. "But this is part of a much deeper story - the uncertainty surrounding the future of the Chinese economy... These headlines are part of the ongoing saga as to whether there is any truth to the consistent rumours that authorities are discussing whether some of the measures will be lifted in the first quarter."
Covid is taking its toll on China at the moment, with the highest number of new Covid-19 infections in six months. As of this weekend, the country is saying it will adhere to its strict coronavirus curbs.