Apple shares fell about 2% on Monday after Bloomberg reported that disruptions at a Foxconn factory in China could cost production of around 6 million iPhone Pro models.
The Foxconn riots came amid protests in China against China’s corona zero policy. Cases of Covid-19 are on the rise in mainland China, leading to home lockdowns and business closures in many major cities. Anti-lockdown protests erupted across the country, including at Foxconn’s iPhone assembly plant in Zhengzhou.
Foxconn employees are protesting the company’s handling of food shortages, pay issues and the Covid-19 outbreak. On Wednesday, workers smashed cameras and windows during the protests.
Foxconn said on Wednesday it would continue to communicate with employees and the government to prevent similar violent incidents. He said he will continue to communicate with employees about their pay concerns and will “do our best to proactively address employee concerns and reasonable claims.”
Analysts are also concerned about recent production disruptions ahead of the holiday season.
Counterpoint Research released the forecast on Monday. the iPhone 14 Pro and Pro Max delivery date will be significantly delayed. Customers who ordered the phone last week can expect to wait 37 days for delivery, the longest wait since the model’s launch. Apple’s regular iPhone 14 is still in stock.
In a separate note on Monday, Wedbush analyst Dan Ives predicted a significant shortage of iPhones due to China’s “zero head-scratching Covid policy”.
Ives said: “Apple estimates that it is currently facing a significant shortage of iPhones and, depending on the coming weeks in China surrounding Foxconn manufacturing and protests, at least 5% of units in the quarter could possibly drop by up at 10%”.
JPMorgan was more upbeat in a note released on Sunday, but still expressed concern about the slowdown in China. “Continuing challenges related to the slow return to normal production levels at the Zhengzhou plant may limit the pace of balancing supply and demand in the coming months, but supply is expected to start from the bottom. Appears to be on the mend,” the company wrote.