Expect fewer iPhones in your Christmas stockings: Apple just warned of fewer iPhone 14 Pro and Pro Max shipments due to supply disruptions in China
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- Apple told customers that iPhone 14 Pro and Pro Max deliveries may take longer than expected.
- The company said strict COVID measures at a major iPhone factory in Zhengzhou has slowed production.
- Workers at the factory had to live in prison-like conditions under China's zero-COVID policy.
Customers who ordered the iPhone 14 Pro or iPhone 14 Pro Max should expect "longer wait times" for their new phones, Apple warned on Sunday.
The tech giant said it's anticipating lower shipments for the newest iPhone models than previously expected, due to COVID restrictions at a primary assembly plant in Zhengzhou, China.
"The facility is currently operating at significantly reduced capacity," Apple said in a statement. "We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker," the company added.
On Sunday, Apple said demand for both the iPhone 14 Pro and Pro Max is still strong. However, according to a Bloomberg report published Monday, Apple expects to produce at least 3 million fewer units of the iPhone 14 this year than originally anticipated. The reduced production is primarily due to lower demand, per Bloomberg.
Preorders for the iPhone 14 Plus and basic iPhone 14 were "significantly lower than expected," Apple analyst Ming-Chi Kuo wrote in September. Two of Apple's suppliers have since cut production of the iPhone 14 Plus by 70% and 90% respectively in October, per The Information.
Apple did not immediately respond to Insider's request for comment.
Foxconn locked down a factory after a COVID outbreak
Foxconn, the Taiwan-based electronics manufacturer that makes 70% of global iPhone shipments, per Reuters, has in recent weeks deployed stringent COVID measures at its major factory in Zhengzhou to keep in line with China's zero-case policy.
A coronavirus outbreak at the factory and the surrounding region has pushed Foxconn to implement a "closed-loop" system, in which workers — many of whom come from rural towns and villages across China — are only allowed to travel directly between their company-run dormitories and the factory. After the outbreak, photos and videos showed some Foxconn workers attempting to flee the factory by scaling fences and walking down highways.
In a statement on Chinese social-media platform WeChat on Sunday evening, Foxconn said it is moving all of its active workers into three company-operated dormitories.
The closed-loop system could impact iPhone production at the plant by as much as 30%, Reuters reported on October 31.
Foxconn has since raised wages for its workers in a bid to lure them back to the Zhengzhou plant and boost production ahead of the holiday season. The company is also battling rumors that some of its workers died from COVID-19 while in quarantine at an on-site dormitory.
In response to questions from Insider, Foxconn pointed to its unaudited monthly revenue report for October, which it published on Monday Taiwan time. Foxconn saw revenue drop 5.56% month-on-month in October, the report showed.
"The company's visibility for the fourth quarter was originally 'cautiously optimistic,' but due to the pandemic affecting some of our operations in Zhengzhou, the company will 'revise down' the outlook for the fourth quarter," it added.
Foxconn declined to comment on further questions from Insider on its expected earnings for the fourth quarter or how it would revise down its outlook.
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