Almost 98 per cent of Apple’s iPhones are made in China, and although it plans to move manufacturing to India and Vietnam, cutting Chinese production of iPhones by a mere 10 per cent will take eight years. This is why covid restrictions which have shrunk exports from China by 0.3 per cent are bound to hurt Apple’s capacity for fulfilling the growing global demand for its flagship device. India’s iPhone demand hit a record this year with six million shipments entering the country, but with Apple’s biggest factory in China’s Zhengzhou under lockdown, the supply might slow down.
Reliance on China proves costly
After reports that the production at the plant that supplied half of the world’s iPhones could drop by 30 per cent, Apple has admitted that the facility will function at limited capacity, without elaborating how far it will be hit. Images of workers making a run from the factory with two lakh employees by jumping fences went viral recently, causing more concern for Apple about its operations in China. Although two manufacturers from Taiwan are now permitted to manufacture iPhone 14 and IPhone 14 Pro Max models in Indian factories around Chennai, the country only accounts for 6 per cent of Apple’s total production.
No relaxation anytime soon
With output from the major unit expected to be down by three million units, customers will have to wait longer before getting deliveries of the latest iPhone. As China’s covid cases were rising, investors had been waiting for news about the country relaxing restrictions under a zero-covid policy adopted by Xi Jinping who’ll be in power for a while now. But the market was disappointed when China announced that it won’t be lifting restrictions, which means that Apple won’t get respite anytime soon.
As consumers will have to wait for 25 days to get their hands on an iPhone 14 series handset, Apples shares have also plunged because of the setback.
