China’s ongoing COVID spikes may delay upcoming shipments of Apple products, including the new iPhone 14.
Key Details
- Despite a strong demand for the iPhone 14 Pro, the company says upcoming holiday shipments will be smaller and take more time as production has decreased, Fortune reports.
- Deliveries for current orders are reportedly expected as late as December.
- The Chinese government has placed the Hon Hai Precision Industry plant and its surrounding areas in quarantine due to onsite COVID outbreaks as part of its “Zero-COVID” policy.
- The facility is still operational and producing phones but at a significantly reduced capacity.
- Reuters reports production could decrease by as much as 30%.
- The delay is impacting the company in one of the most consumer-demanding times of the year in the run-up to the holiday season.
Why it’s News
COVID numbers in China have spiked in the past three months, particularly following October 1 when the country held its annual New Year’s celebrations. The country has been progressively locking down large areas of the country to slow the spread of the virus. Apple and its manufacturer Foxconn are taking the brunt of the government’s policy changes at the moment.
“The local government has ordered people and vehicles off the streets except for medical or other essential reasons, a prohibition that threatens to cut off the flow of additional workers and components needed to rev up production ahead of the holiday season crush,” says Fortune.
“The measures may further compound the headaches Foxconn and Apple are already facing as iPhone sales slow in China. Apple, the world’s most valuable company, said last month it expects growth to decelerate in the current period.”
Backing up a Bit
The country’s overall connection to the west has grown more tenuous in the past year with the country putting more effort into centralizing its economy and discouraging frivolous activities. Western movies, which could once depend on the Chinese box office for major sales, have largely fallen off in the past year.
As we previously reported, foreign investors have also started backing away from the country as its government consolidates more power in the Communist Party. The U.S. has been more confrontational against Chinese aggression by calling out its government’s illicit connections to TikTok and illegal data harvesting and by partially preemptively cutting off the country’s supply of chips. Many western manufacturers are considering moving out of China.
Notable Quote
“Zhengzhou, a city of nearly 13 million, is struggling to contain its worst outbreak in months while keeping its economy on an even keel. China reported on Monday 5,496 new locally transmitted COVID-19 cases for November 6—the highest since May 2 when the country’s commercial capital of Shanghai was put under a crushing lockdown amid its worst outbreak,” says The Guardian.