Apple warned investors and customers on Sunday that it expects to ship fewer iPhone 14 Pro and iPhone 14 Pro Max units as the world’s most valuable tech firm grapples with the ongoing Covid-19 lockdown in China.
The company said it continues to see strong demand for the pro models of the new iPhone 14 lineup, but the lockdown restriction has prompted it to slash its earlier shipment estimates. The warning comes at a crucial time for Apple as the company, like many others, prepares for the holiday shopping season.
“The facility [located in Zhengzhou, China] is currently operating at significantly reduced capacity. As we have done throughout the COVID-19 pandemic, we are prioritizing the health and safety of the workers in our supply chain,” the company said in a blog post.
China ordered a seven-day lockdown of the area surrounding Foxconn’s flagship plant in Zhengzhou earlier this month, doubling down on a similar restriction placed on the region last month.
The assembly line, known as iPhone city, is the largest manufacturing site for Apple’s smartphones and home to about 200,000 workers. The Foxconn-owned plant produces four out of five of the current generation iPhone handsets, according to analysts at research firm Counterpoint.
In a separate announcement, Foxconn said on Sunday that it would “revise down” its own outlook for the fourth quarter and that it was working with the authorities to “resume production to its full capacity as quickly as possible.”
Like many firms, Apple has been navigating ways to sustain its products shipments amid a global supply chain disruption for over two years. The disclosure surrounding the shipments on Sunday is rare for Apple, which has largely chosen to make such disclosures at its quarterly earnings calls.
The update, however, doesn’t come as a surprise. Apple chief executive Tim Cook said in the recent earnings call last month that supply for the iPhone 14 Pro and iPhone 14 Pro Max have been “constrained” since launch. “We continue to be constrained today and so we’re working very hard to fulfil the demand,” he said on the call.
The company said Sunday that it was “working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker.”
Source by techcrunch.com