Apple’s supply chain still affected by China’s COVID issues

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Any company’s supply chain is an integral part of how that company operates and maintains profitability. Many electronics makers, whose products many use, have some or their supply chain located in China. Apple is probably one of the larger companies that utilize Chinese supply chain resources.

Estimated reading time: 2 minutes

Apple’s primary third-party partner is Foxconn. Foxconn’s main “mega factory” in Zhengzhou, China, has been the epicenter of protests and unrest due to a COVID outbreak in October. The factory is known as iPhone city, the main factory for assembling Apple’s iPhones.

This outbreak and the subsequent handling of the protests and unrest have led to delays for Apple customers ordering the higher-end model of iPhone. Apple has tried to mitigate the issue by working with suppliers and Foxconn and moving production to other factories in China.

The CCP’s zero-COVID policy is being blamed for many of the supply chain issues plaguing Apple and other consumer goods manufacturers. Apple warned consumers that its products’ availability would be impacted this holiday season.

“We should be seeing a lot of operations get impacted by absenteeism, not just at factories, but warehouse, distribution, logistic and transportation facilities as well,” said Bindiya Vakil, chief executive of Resilinc, a California-based group that tracks more than 3 million components to provide supply chain mapping services.

The consensus among analysts is that company revenues this quarter will fall just below the record $123.9 billion it achieved over the same period last year, with net profits projected to tumble more than 8 percent, according to bank estimates pooled by Visible Alpha. That would break a 14-quarter revenue growth streak as Apple experiences a shortage of between 5 million and 15 million iPhones.

ArsTechnica

For now, until Foxconn and the Chinese government can get a handle on the COVID issue, Apple is going to have to work around the problem. But as long as the issue remains, Apple is likely going to be affected.

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Last Updated on December 26, 2022.

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