Apple Inc. expects lower shipments of high-end iPhone 14 models than previously anticipated following a significant production cut at a virus-blighted plant in China, dampening its sales outlook for the year-end holiday season.
Solid demand for the new iPhones has helped Apple remain a rare bright spot in the global tech sector that has been battered by spending cutbacks due to surging inflation and interest rates.
“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated,” it said. Market research firm TrendForce said last week it has cut its iPhone shipments forecast for the December quarter by 2–3 million units, from 80 million previously, due to the troubles at the Zhengzhou plant, adding that its investigation of the situation found that the factory’s capacity utilization rates were now around 70%.
“Anything that affects Apple’s production obviously affects their share price,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. It said it would implement new measures at the plant to curb the spread of COVID-19, including a system that would restrict working employees’ travel to between their dormitory and factory area.
“Foxconn is now working with the government in concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible.”
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