According to analyst estimates shared by the news agencyReuters, the restrictions put in place in China to fight the coronavirus pandemic could soon seriously penalize Apple.Some of its major subcontractors, such as the Pegatron company, have had to temporarily suspend their activities. Two of the group's factories, located in Shanghai and Kunshan, are thus at a standstill. It is on site that are producedthe iPhone 13and the iPhone SE, among others.
These unfortunate events could costsix to ten million iPhonesat the Apple in the event that the quarantine lasts two months. Compared to the average selling prices of the mobiles in question, this sum amounts to nearly ten billion euros. If the situation only lasts a few weeks, however, the delivery delays would be easy to make up for, according to Forrest Chen, researcher at Trendforce.
Getting worse and worse
Another major risk for Apple's revenues: the delays of Quanta, suggested as a supplier of spare parts for the group's autonomous car but also behind the success of the MacBooks. To remedy this, the Californian will probably have to rely onnew partnerscommercial but it is currently impossible to know whether such contracts are already in progress or not.
Let us add to this thatZhengzhouhas also just confined neighborhoods surrounding Foxconn premises, which should not help the fate of the iPhones assembled there. Especially since screening tests were imposed on the employees of the Taiwanese service provider, therefore risking further inflaming the vehemence of officials.
Negotiations in progress
For Ming-Chi Kuo, an informant who no longer needs to be introduced, Apple would however do its best to arrive at aagreement with the governmentof the Middle Kingdom. Objective: restart the production lines as quickly as possible, if possible no later than next week.
(2/2) I'm not sure if Apple can succeed, but it may explain why Apple supply chain has not seen significant order cuts after the COVID lockdowns. In addition, the aggressive negotiation for the resumption of work also represents most Apple products have strong demand now.
— Ming-Chi Kuo (@mingchikuo)April 15, 2022
An encouraging sign is that Apple has not yet sent a notification to its suppliers to reduce its number of orders. This therefore suggests that the group still controls sufficient stock and thatdemand is still strong.
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By : Keleops AG
