Apple’s shares fell by about 2 percent on Monday due to fears of further production restrictions on the latest model of iPhone 14 Pro and Pro Max amid significant unrest in Chinese factories that has escalated in recent days due to strict Covid-19 measures in China.
Reuters reports that Foxconn, the world’s largest iPhone factory where the vast majority of the most sought-after iPhone 14 Pro and Pro Max devices are produced, could see further declines in shipments in November as employees protest against working conditions and strict coronavirus measures.
Additionally, Bloomberg reported that there could be a shortage of up to six million iPhone Pro models due to production issues, and Apple has already reduced its production target from 90 to 87 million devices. Delivery times for Pro models have been shortened everywhere except in China, where they remain extended. Customers in the U.S. are waiting about 33 days for their iPhone 14 Pro and Pro Max models to be delivered, while the same models are not available for pickup in stores, according to J.P. Morgan.
Much will depend on how quickly Foxconn Technology Group, the Taiwanese company that operates the factory, can return people to production jobs after protests against Covid-19 restrictions. If the situation does not improve in the coming weeks, production could be further delayed. In the worst-case scenario, J.P. Morgan predicts that the factory in Zhengzhou may not be able to deliver any iPhones by the end of the year, resulting in a 20 percent drop in sales this quarter. However, Apple and Foxconn still hope to recover those six million lost models in 2023.
