Apple: iPhone shipments delayed due to the Covid blockade in China

Apple has warned buyers to expect delays in receiving its products after a strict Covid lockdown forced the closure of the world’s biggest iPhone factory.

The tech giant said its assembly plant in Zhengzhou, China is now operating with significantly reduced capacity.

On November 2, officials closed the district where the Foxconn-operated factory was closed for seven days.

It comes as China continues to focus on “zero Covid,” using blockades to deal with even minor outbreaks.

“As we did during the Covid-19 pandemic, we prioritize the health and safety of workers in our supply chain,” reads a statement from Apple, which launched its new iPhone line in September.

“We continue to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect shorter shipments of the iPhone 14 Pro and iPhone 14 Pro Max than previously expected and customers will experience longer waiting times to receive their new products. “

The announcement is likely to disappoint investors who hoped China would lift Covid restrictions in the near future. Chinese stocks rallied sharply on Friday after rumors about the end of the blocks.

Beijing’s uncompromising approach to containing the spread of the virus has come at a huge economic cost. But the country’s leader, Xi Jinping, who personally supported the policy, did not say that he will ease soon.

The latest data shows that the world’s second largest economy is struggling to cope with protracted challenges due to ongoing Covid restrictions, the housing crisis and the risk of a global recession. Chinese trade figures released on Monday showed its imports and exports fell unexpectedly in October. This is the first decline since May 2020. Outbound shipments fell 0.3% year-on-year this month, in stark contrast to a 5.7% rise in September. This is the worst performance since May 2020.

The country reported 5,643 new Covid infections on Sunday, the highest daily number in six months. Zhengzhou, where the Foxconn factory is located, is the capital of Henan province in central China and has a population of about 10 million. 3,683 cases and 22 deaths were recorded on Monday.

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Cases were also discovered at the factory, leading to a sudden shutdown that caused workers to flee the site. On Monday, the company launched a recruitment campaign at its factory in Zhengzhou. It offers workers who left the factory between October 10 and November 5 a one-time bonus of 500 yuan (US$69; £60.88) if they return to work. It also offers a 30 yuan per hour pay raise, according to a statement on its WeChat recruiting account.

Foxconn, the world’s largest contract electronics manufacturer, lowered its fourth quarter outlook due to Covid control measures in China. The fourth quarter is usually a busy time for the tech company as demand for electronics picks up ahead of the season’s end in the West.

The Taiwan-based company said it is working with the Henan provincial government “to eradicate the pandemic and resume full production as soon as possible.”

Foxconn, formerly known as Hon Hai Precision Industry, accounts for 70% of iPhone shipments worldwide.

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