Apple said it expected “lower than expected” shipments of the new iPhone, due to a lockdown imposed on the world’s largest iPhone factory in the Chinese city of Zhengzhou, following an outbreak of Covid-19.
The US group explained this Sunday that the Foxconn factory located in the Zhengzhou Airport Economic Zone, capital of the central Chinese province of Henan, is paralyzed due to the restrictions imposed on Wednesday.
Chinese authorities closed access to the area, prohibiting any entry or exit, for a period of one week, except to deliver food and health equipment, after Foxconn employees escaped from the premises.
“Customers will have to wait longer to receive their new products,” Apple concluded. “As we have done since the beginning of the pandemic, we are prioritizing the health and safety of workers in our supply chain,” the company added.
The Taiwanese group Foxconn, Apple’s main supplier, has been facing an increase in Covid-19 cases since October in the Zhengzhou industrial complex, about 600 kilometers from Beijing, which employs about 300,000 people.
Also on Sunday, Foxconn announced a “downward” revision of production forecasts for the fourth quarter of this year, due to anti-covid-19 measures in China.
“In general, almost all iPhones are made in Zhengzhou,” Ivan Lam, an analyst at specialist firm Counterpoint, told Agence France-Presse.
More than 90% of Apple products are made in China, which is also one of the most important markets for the company.
From July to September, the North American group saw sales of the iPhone, its main product, grow by 9.7% year-on-year, to 42.6 billion dollars (42.9 billion euros).
Foxconn is China’s largest private sector employer, with more than a million people working in some 30 factories and research facilities across the country.
The Taiwanese company said on October 30 that it was working in a “closed loop,” an official term meaning employees were prohibited from leaving their workplaces.
Videos posted on Chinese social media a few days later showed hundreds of Foxconn employees jumping fences and walking on the side of a road, carrying suitcases and other belongings.
The Chinese Communist Party maintains a strategy of ‘zero cases’ of covid-19, which implies the confinement of entire neighborhoods and cities and the isolation of all positive cases and their direct contacts.
This keeps China’s infection levels low, but also halts economic activity, at a time when the rest of the world has lifted restrictions.
Source: TSF
