Apple struggles with production of iPhones in China due to covid curbs: report
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The continuing covid lockdowns in China has thrown out of gear the production of Apple's iPhones after the company's biggest contract phone maker Foxconn's facility in Zhengzhou in central China reduced capacity, according to Reuters.
While the rest of the world is getting along with emerging variants of covid, China continues to be plagued by the pandemic with the nation on Sunday reporting its highest number of new Covid 19 infections in six months.
Alongside, China has put in place its strictest covid curbs as part of its zero-covid policy which saw global firms including Estee Lauder Companies Inc (EL.N) and Canada Goose Holdings Inc (GOOS.TO) shut their stores in China, according to the report.
In the difficult situation that continues for over a year, Apple reportedly expects lower shipments of its trendy iPhone 14 models than previously anticipated after the production cut at its plant in China.
California-based company's sale prospects look bleak as it is unable to meet growing demand for its latest series of iPhones, which will dampen sales outlook for the year-end holiday season.
The iPhone-maker however would not expand on how covid restrictions impacted its operations in China but chose instead to state on Sunday that "The facility is currently operating at significantly reduced capacity"
"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," Reuters quoted the statement.
Apple, whose revenue growth would fall below 8% in the December quarter, said customers will have to wait longer periods to receive their new products.
Apple's main production plant operated by Taiwan's Foxconn, located in Zhengzhou in central China, employs about 200,000 people.
However, workers have been fleeing the plant after China went about tightening its covid policy.
Foxconn, which accounting for 70% of iPhone shipments globally, reportedly issued advertisements to lure workers on Monday offering those who had left the plant a one-off bonus of 500 yuan( $69) alongside an hour-base play hike from 17-23 yuan to 30 yuan an hour, according to Reuters.
Earlier reports said China is facing far more severe economic crisis than it tries to project in glossy terms.