Apple may miss its production target of around six million units for its flagship iPhone 14 Pro models worldwide, it says. bloomberg Monday 28 November.
Workers at the world’s largest iPhone factory, located in Zhengzhou, China, are protesting delays in the payment of their bonuses and poor living conditions due to China’s strict Covid restrictions.
according to bloombergThe exact size of the shortage is not yet known and will likely depend on manufacturer Foxconn’s ability to hire enough workers for the iPhone assembly line to meet production targets.
Earlier this month, Apple lowered its iPhone 14 production target by three million units due to covid-related disruptions at the Foxconn factory and that number has now been revised again.
Workers at Foxconn’s Zhengzhou factory, sometimes referred to as “iPhone City,” have been forced to live on site in a closed bubble, and can only go from the factory to their rooms due to lockdown measures.
While sales of the cheaper iPhone 14 and 14 Plus have slowed, the more expensive iPhone 14 Pro and Pro Max are still in demand in the US.
Although Apple has diversified its manufacturing chain by producing some of its devices in India and Vietnam, almost all flagship iPhone 14 Pro models are made in the Zhengzhou factory.
Apple shares have decreased 1.87% In pre-market trading on Monday, November 28th.
Initially, Apple’s production target for the iPhone 14 was 90 million units This year, he says bloomberg.
In a note, investment firm Wedbush Securities said, “We estimate that Apple is now experiencing a significant iPhone shortage that could reduce unit production by at least 5% in the quarter and possibly as high as 10% depending on the development of production and protests in China.” The memo also adds, “China’s zero-virus policy was a deathblow to Apple’s supply chain with Foxconn protests in Zhengzhou.”
And Apple expected disruption from China’s measures to combat the Corona virus, as it issued a statement earlier this month warning of a delay in shipments of iPhone Pro models. The statement blamed “health restrictions” for affecting production at the Foxconn plant, and said customers trying to buy the higher-end models would face longer waiting times. Currently, on the Apple website, the iPhone 14 Pro or Pro Max waiting period is one month. The cheaper iPhone 14 and 14 Plus can be purchased the same day at most Apple Stores.
Last week, violent clashes broke out between security personnel and workers at Foxconn’s factory over delayed payments and poor living conditions. Many workers said they feared they would not get the promised bonuses for joining the factory if they did not stay until March. New recruits were lured in by promises of pay increases and bonuses after hundreds of workers fled the factory campus in October, fearing the impact of strict health measures. Foxconn eventually apologized and blamed the problems on a “technical error” in the hiring process. In an effort to appease the angry recruits, the company offered Compensation of 10,000 yen For those who want to leave the factory. According to Reuters approx 20,000 recruits Accepted Foxconn’s offer, nearly 10% of 200,000 employees from Zhengzhou factory.
Translated article from the American magazine Forbes – Author: Siladitya Ray
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