Business Maverick: Apple to Lose 6 Million iPhone Pros From Tumult at China Plant

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Turmoil at Apple Inc.’s key manufacturing hub of Zhengzhou is likely to result in a production shortfall of close to 6 million iPhone Pro units this year, according to a person familiar with assembly operations. The shares slumped in early US trading.

of as much as $1,800 per month for full-time employees staying at the factory through December and January.

The highly visible and unusual protests in Zhengzhou aggravated an already challenging business environment. The enormous complex hosts as many as 200,000 workers during peak iPhone production season. More than 20,000 new hires are reported to have left after the protests. The departure of new workers is less of a factor in production than the quarantines imposed on existing employees because of their experience and skill, another person familiar with assembly operations said. Foxconn is actively recruiting additional employees, with help from government officials. The Taiwanese company, China’s largest private-sector employer, has years of experience hiring assembly personnel by the tens of thousands, particularly during peak season.

Apple and Foxconn, also known as Hon Hai Precision Industry Co., said earlier this month that shipments of its newest premium iPhones will be lower than previously expected because of China’s lockdowns without providing specifics.for Apple and Foxconn, in which the Zhengzhou facility couldn’t ship any iPhones for the rest of the year. That would result in a 20% shortfall in expected sales for Hon Hai in the current quarter, analysts led by Sharon Shih wrote in the research note Nov. 7.

Amir Anvarzadeh, an analyst with Asymmetric Advisors, said it can’t be helped that Apple and Foxconn will take a hit from China’s Covid policies. But it’s likely to encourage them to seek out alternative manufacturing locations, such as India and Vietnam.

 

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