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A slowdown in the growth for handheld device was partly expected, but losses there were meant to be made up by the sale of other stuff, like advertising, apps, credit cards, and license fees from Google. Apple recently put on ice plans to increase production of the newly launched iPhone 14. More worrisome are other nagging problems, like slowing demand. It’s not ideal, but Apple’s kingdom isn’t really threatened by supply.
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With iPhones accounting for just over half of revenue in the same quarter last year, that adds up to a roughly 1% loss to revenue. Take Foxconn’s 70% share of production into account, and roughly a third loss at Zhengzhou, and just 2.5% of iPhone sales would take a hit. Apple sold about 35% of all iPhones last year during the holiday quarter, so if the complex’s problems last one month, about 12% of the sales would be disrupted. Still, in context, it should be manageable. More delays could mean fewer iPhones sold during the holidays. It’s bad timing, because customers ordering high-end phones now already have to wait until the first or second week in December. Production could fall up to 30% according to a Reuters’ source. Foxconn is responsible for some 70% of all iPhones according to Fubon Research, and most of these phones are made in that plant.
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6 that disruption at the Zhengzhou complex has lowered shipments of high-end iPhone 14 Pro phones. The company led by Tim Cook warned on Nov. But problems there look pale in comparison to other issues caused by Apple’s own consumers. The $2.2 trillion technology giant has warned that woes caused by a Covid-19 outbreak at its supplier, Foxconn (2317.TW), could cut into production. NEW YORK, Nov 7 (Reuters Breakingviews) - There are many ways to slice Apple (AAPL.O).
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