By Ambar Warrick
Investing.com-- iPhone maker Apple Inc (NASDAQ:AAPL) on Sunday flagged lower shipments and longer wait times for its top-end iPhone 14 models due to COVID-19 lockdowns affecting a major assembly facility in Zhengzhou, China.
Apple said the factory is currently operating at a “significantly” reduced capacity. The move comes after China imposed a lockdown in the Zhengzhou Airport Economy Zone in central China, which houses the world's largest iPhone factory, belonging to Foxconn (TW:2317).
Shipments of the iPhone 14 Pro and iPhone 14 Pro Max models will be lower than previously expected, Apple said in a statement, with customers also facing longer wait times for the products.
Several reports said that workers had fled the Apple plant in the past week to avoid being locked in the factory, with the lockdown coming amid China’s worst COVID outbreak since May. Other industrial regions, including economic capital Shanghai, also saw the reimposition of new curbs.
Reuters recently reported that the new curbs in China could dent Apple’s iPhone output by up to 30% in November, and that the company was attempting to keep production steady by shifting some orders to other plants in Shenzhen.
China’s zero-COVID policy caused widespread disruption in the global supply chain this year, particularly for tech giants like Apple that heavily depend on the country as an assembly hub.
This has also sent the Cupertino, California-based company racing to find new suppliers. The company recently added a new supplier in India in an attempt to shift further away from China.
Apple said on Sunday that it continues to see strong demand for the top-end iPhone models. iPhone sales are the largest source of revenue for Apple, with the company logging $42.6 billion in phone sales in the quarter ending in September.
But the company had earlier this year warned that continued disruptions in China could impact its bottom line.
Taiwan’s Foxconn, which is Apple’s biggest supplier, warned on Monday that it was lowering its fourth-quarter outlook due to the lockdowns in China, particularly in Zhengzhou.