Buyers looking to purchase Apple devices should be aware of the ongoing lockdowns in certain Chinese provinces that might impact the iPhone supply line and lead to potential delivery delays. The first closures came in March, as China was fighting a new wave of COVID-19 in the country. The Shenzhen government announced new lockdown measures that impacted some Apple products Foxconn manufactures in the region, but the iPhone was spared.
More recently, China imposed additional lockdowns. The new measures forced Apple suppliers like Pegatron to pause operations at facilities in Shanghai and Kunshan that assemble iPhone models, including the iPhone 13 and iPhone SE 3.
An insider claims Apple is already negotiating with the Chinese government to prevent significant supply chain disruptions.
New lockdowns in China
Foxconn and Pegatron aren’t the only Apple suppliers dealing with the new lockdowns. Quanta Computer also shut operations earlier this week in Shanghai. The company manufactures three-quarters of Apple’s MacBooks.
Assessing the lockdown situation in China, Reuters reported on Friday that Apple products will face delays if the measures persist.
The prolonged lockdowns force assemblers to shut down productions and make closed-loop arrangements harder to support. The lockdowns have jammed highways and ports, the report notes. Moreover, countless factories are awaiting approval from the government to reopen. In turn, the disruptions impact global supply chains.
Reuters says the final impact on Apple’s supply chain is uncertain, as it’s unclear how long the lockdowns will persist. Moreover, Apple might choose to re-route production out of Shanghai and Kunshan to other factories in regions that have not imposed new lockdowns. However, even such solutions might not be practical.
iPhone delivery delays expected
Isaiah Research analyst Eddie Han told Reuters that Pegatron might fall behind on 6 million to 10 million iPhone units if the lockdowns last two months and Apple can’t reroute orders. In such a case, some markets might experience some iPhone delivery delays as the existing stock dwindles.
Reacting to the lockdown reports from China, analyst Ming-Chi Kuo took to Twitter to say that Apple is “doing its best to negotiate with the Chinese government” so that production lines that were shut down amid the new lockdowns can reopen production next week.
Kuo added that it’s unclear whether Apple can succeed. But the negotiations might explain why the Apple supply chain hasn’t seen significant order cuts after the new COVID-19 lockdowns. Moreover, the analyst said that the aggressive negotiations concern the Apple products that see strong demand right now.
Earlier this week, Kuo said that Apple is more likely to deal with MacBook delivery delays than iPhone. That’s because Quanta manufactures most of Apple’s laptops.
On the iPhone side of the business, Foxconn can keep up production and make up for some of the lost Pegatron orders, Kuo also said. If the latter can gradually recover, then the lockdowns’ impact on iPhone supply will be limited. However, if the lockdowns last longer, they could lead to manufacturing and shipping issues in the second half of the year. That said, it’s too early to tell whether the iPhone 14 will see any delivery delays.
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