Apple said it expected “less than expected” shipments of the new iPhone due to the lockdown imposed around the world’s largest iPhone factory, in the Chinese city of Zhengzhou, following a Covid-19 outbreak.
The US group explained on Sunday that the Foxconn plant in the Zhengzhou Airport Economic Zone, the capital of central China’s Henan province, has been paralyzed due to restrictions imposed on Wednesday.
Chinese authorities closed off access to the zone and banned any entry or exit for a period of one week, except to deliver food and health equipment, after Foxconn employees left the premises.
“Customers will have to wait longer to receive their new products,” Apple concluded. “As we have done since the start of the pandemic, we are prioritizing the health and safety of workers in our supply chain,” the company added.
Taiwanese group Foxconn, Apple’s main supplier, has been dealing with an increase in Covid-19 cases since October in the industrial complex of Zhengzhou, about 600 kilometers from Beijing, which employs nearly 300,000 people.
Also on Sunday, Foxconn announced a “downward” revision to manufacturing forecasts for the fourth quarter of this year, amid anti-covid-19 measures in China.
“Normally, almost all iPhones are produced in Zhengzhou,” Ivan Lam, an analyst at specialist firm Counterpoint, told Agence France-Presse.
More than 90% of Apple’s products are made in China, which is also one of the company’s most important markets.
From July to September, the North American group saw sales of the iPhone, its flagship product, rise 9.7% year-on-year to $42.6 billion (EUR 42.9 billion).
Foxconn is the largest private sector employer in China, with more than a million people working in approximately 30 factories and research facilities across the country.
The Taiwanese company said on Oct. 30 that it was working on a “closed circuit,” an official term meaning employees are not allowed to leave their workplaces.
Videos broadcast on Chinese social media a few days later showed hundreds of Foxconn employees jumping over fences and walking by the side of a road, laden with suitcases and other belongings.
The Chinese Communist Party maintains a “zero cases” strategy of covid-19, which involves the incarceration of entire neighborhoods and cities and the isolation of all positive cases and their direct contacts.
This keeps the contamination level in China low, but also halts economic activity, at a time when the rest of the world has lifted restrictions.
Source: DN
