Apple warns of lower iPhone shipments as COVID curbs hobble China plant
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Apple warns of lower iPhone shipments as COVID curbs hobble China plant

Apple warns of lower iPhone shipments as COVID curbs hobble China plant

The major production decrease at the virus-blighted facility in China has dampened Apple Inc.’s (AAPL.O) sales expectations for the key year-end holiday season because of fewer shipments of luxury iPhone 14 models than had been expected.

Apple warns of lower iPhone shipments as COVID curbs hobble China plant

Apple warns of lower iPhone shipments as COVID curbs hobble China plant

Although the technology industry as a whole has taken a beating due to consumer spending cuts in the face of rising inflation and interest rates, Apple has remained a bright light because to the demand for high-end iPhones built at Foxconn’s (2317.TW) Zhengzhou facility.

China’s zero-COVID-19 policy has hurt businesses throughout the world, including the Cupertino, California-based supplier Canada Goose Holdings Inc (GOOS.TO) and Estee Lauder Companies Inc (EL.N), who have closed shops in the country and reduced their sales projections.

Apple said on Sunday that “the plant is presently operating at severely reduced capacity,” without providing any details.

“The demand for the iPhone 14 Pro and iPhone 14 Pro Max remains high. However, we anticipate fewer than expected sales of the iPhone 14 Pro and iPhone 14 Pro Max “a statement from company said.

Production of iPhones at Foxconn’s Zhengzhou facility, one of the world’s largest, may drop by as much as 30 percent in November owing to COVID-19 limits, according to a report from earlier this month.

About 200,000 employees are employed at the central China industry that has been shaken by anger by strict efforts to control the development of COVID-19.

Last week, TrendForce, a market research firm, said that it was lowering its iPhone shipping prediction for the period of October to December from 80 million to only 2 million to 3 million units owing to the problems at the manufacturing.

For the iPhone 14 series, which Apple started selling in September, increased wait periods have been announced.

According to Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, “everything that impacts Apple’s output affects their share price.”

“However, this is just the tip of the iceberg when it comes to the future of the Chinese economy and the uncertainty it engenders. These headlines are related to the continuing tale of whether or not the persistent rumours that officials are considering whether any of the restrictions would be eased in the first quarter have any basis in reality.”

The number of newly reported COVID-19 infections in China on Monday was the highest it has been in six months, continuing a trend that began in October and has expanded across the world’s second-largest economy. Health authorities said over the weekend that they will maintain stringent coronavirus limitations, frustrating investors who had hoped for a loosening.

Meanwhile, Bloomberg News reported on Monday that, because to sluggish demand for lower-end versions, Apple intends to create at least 3 million fewer iPhone 14 phones this year than expected.

With a market capitalization of $2.2 trillion, the world’s most valuable company predicted this month that sales growth for the quarter of October through December would decrease from the previous quarter’s 8%; yet, market observers saw this as positive in a battered industry.

We believe this signals to the possibility for a longer and more severe lockdown,” Credit Suisse analysts said, anticipating iPhone sales to be delayed rather than lost, given that Apple reported just two weeks ago with optimistic outlook.

 

 

 

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Apple warns of lower iPhone shipments as COVID curbs hobble China plant
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