(NEW YORK) — Apple said on Sunday that COVID-19 restrictions at an iPhone factory in China have “temporarily impacted” shipments of its flagship phone.
The world’s most valuable company said a facility in Zhengzhou run by Foxconn, one of Apple’s largest suppliers, was “currently operating at significantly reduced capacity.”
“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple said in a statement. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”
UBS analysts on Sunday said the delay may affect “several million” of the about 41 million phones they estimate Apple will build in the quarter.
“The confluence of Covid disruptions and solid demand for the high-end models will lead to longer wait times for customers to receive their products,” the analysts wrote in a note to clients late Sunday.
Foxconn, as Hon Hai Precision Industry is known, turned its Zhengzhou facility into a “closed-loop” factory because of concerns about COVID-19 in the surrounding area, according to a report last week by Morgan Stanley analysts.
About 60% of Foxconn’s iPhone assembly happens in Zhengzhou, Morgan Stanley analysts wrote in the report.
“However, we do believe the impact of the COVID situation in Zhengzhou is showing up in iPhone lead times, as iPhone 14 Pro and Pro Max lead times have elongated by ~7 days in the last week, to 26 days as of Tuesday, November 1st,” the analysts wrote.
Taiwan-based Foxconn issued a current-quarter outlook on Monday, saying it was originally “cautiously optimistic,” but “due to the pandemic affecting some of our operations in Zhengzhou, the company will ‘revise down’ the outlook for the fourth quarter.”
The company said the local government had “made it clear that it will, as always, fully support” Foxconn’s local production.
“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,” the company said in a statement.
Apple said it’s “working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker.”
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