Problems at Apple’s manufacturing hub in Zhengzhou might leave the California-based tech giant 6 million iPhone 14 Pro and Pro Max devices short.
According to Bloomberg, citing a source who wished to remain anonymous, the situation is not set in stone. The estimate of lost production could change in either direction, depending on how the crisis develops.
However, Foxconn Technology Group, a Taiwanese company that operates the manufacturing hub, also has a significant role to play in determining the outcome of the ongoing crisis. On the company’s part, it remains to be seen how fast it will be able to get the workers back to the assembly line following a spate of violent protests against COVID-19 lockdowns.
What the company has no control over is whether the government will enforce any further lockdowns to try and quell the spread of the virus. The government caving in to the demands of the protesters is highly unlikely as many of them are raising their voices against the Communist party and the president himself.
In the worst-case scenario, both Covid and the violent protests continue to decimate the workforce at the “iPhone City,” as the Zhengzhou complex is known. The massive complex “hosts as many as 200,000 workers during peak iPhone production season,” but 20,000 of new hires have already left since the outburst of violent protests.
If the worst comes to pass, it’s possible that Apple will lose vastly more than 6 million iPhone 14 Pro units. However, if Morgan Stanley analysts’ estimates are accurate, then Apple was already down 6 million devices due to COVID-19 alone, even before the protests had begun. It’s likely that the shortfall of iPhone 14s is already greater than anticipated.
“It demonstrates that everyone, even Apple, is susceptible to supply-chain constraints in China due to Covid,” said Anshel Sag of Moor Insights & Strategy.
If, on the other hand, the government eases up on the restrictions and protests come to an end, then it would be up to Foxconn to find a way to attract additional hires to help account for some of the production lost.
As per Bloomberg, Foxconn “added a bonus of as much as $1,800 per month for full-time employees staying at the factory through December and January.”
Whether that’s enough of a motivation for employees who fear the virus remains to be seen, but for the time being, Apple’s losses appear irrevocable.