Following a large production reduction at a Chinese plant affected by a virus, Apple now anticipates lower shipments of high-end iPhone 14 models than it had previously projected. This dims its expectation for sales over the year-end Christmas 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, according to Reuters.
The strict zero-COVID-19 policy in China, which has already forced many international companies, including Estee Lauder Companies Inc (EL.N) and Canada Goose Holdings Inc (GOOS.TO), to close their stores there and lower full-year forecasts, has now claimed a victim in Cupertino, California-based company.
Reuters last month reported that production of Apple’s iPhones could slump by as much as 30% at one of the world’s biggest factories in November due to tightening COVID-19 curbs in China.
Its main Zhengzhou plant in central China, which employs about 200,000 people, has been rocked by stringent measures to curb the spread of COVID-19, with many workers fleeing the site.
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 utilisation rates were now around 70%.
Apple, which launched sales of the new iPhones in September, said customers will experience longer wait times to receive their new products.
The world’s most valuable company with a market capitalisation of $2.2 trillion forecast in October its revenue growth would fall below 8% in the December quarter.
China on Sunday reported its highest number of new COVID-19 infections in six months, a day after health officials said they were sticking with strict coronavirus curbs, likely disappointing recent investor hopes for an easing.
