Tech analyst Ming-Chi claims that iPhone 14 Pro models shipments would see a further 20% reduction because of labor protests at Foxconn’s Zhengzhou iPhone plant in China.
In early November, Apple confirmed that significant reduction in iPhone 14 Pro and iPhone 14 Pro Max models due to China’s zero COVID-19 policies. To make a bad situation worse, Foxconn’s largest iPhone assembly plant in China called the iPhone City had a COVID-19 breakout and was put under a week-long lockdown.
However, fearing the protocols of a closed-loop production system, several workers escaped the facility when it resumed operations again. Several weeks later, workers rioted at the plant complaining about unsanitary living conditions and denial of promised bonuses.
Shipments of iPhone 14 Pro models reduced by up to 20 million units in Q4, 2022
Kuo explains that recent labor protests have significantly affected production at the Foxconn Zhengzhou iPhone plant. As the plant mainly manufactures iPhone 14 Pro models, their shipment will see a further reduction of up to 20 million units in Q4, 2022.
The average capacity utilization rate of Zhengzhou iPhone plant was only about 20% in November, and it’s expected to improve to 30–40% in December. According to the production recovery progress of the iPhone 14 Pro series, shipments in December were still significantly lower than expected.
Furthermore, the reduction in shipments will also lead to a reduction in revenue for Apple in Q4, 2022, during the Holiday season.
Due to the high price of the iPhone 14 Pro series, Apple’s iPhone revenue in 4Q22 may be significantly lower than the market consensus by 20–30% or more.
During a recession, I believe that most of the demand for the iPhone 14 Pro series in 4Q22 will be wiped out rather than delayed due to a significant supply-demand gap.
Kuo also predicts that Apple might want to diversify its supply chain for iPhone 15 Pro lineup to mitigate the impact of policies in China which means Foxconn might not be the exclusive assembler of Pro models in 2023.