Apple stock down on report of iPhone production shortage



Shares of Apple fell about 2% in early trading Monday after Bloomberg reported the company could see a production shortfall of nearly 6 million iPhone Pro models because of unrest at Foxconn’s China factory.

Bloomberg, citing a source, said Apple and Foxconn do expect to be able to make up that shortfall in 2023.

Apple declined to comment on the report.

The unrest at Foxconn comes amid protests against China’s zero-Covid policy. Cases of Covid-19 have surged in mainland China, prompting residential lockdowns and business closures in many major cities. Protests against the lockdowns have broken out across the country, including at a Foxconn iPhone assembly facility in Zhengzhou.

Employees at Foxconn have protested food shortages, issues related to payments and how the company has handled Covid-19 outbreaks. Reuters said last week that workers smashed cameras and windows during some of the protests.

Foxconn said last week that it will continue to communicate with employees and the government to prevent similar violent incidences from happening. It said it’s also continuing to communicate with employees about payment concerns and that it will “try its best to actively solve the concerns and reasonable demands of employees.”

Analysts are also concerned about the recent manufacturing interruptions ahead of the holiday season.

Counterpoint Research released guidance Monday saying delivery times for iPhone 14 Pro and Pro Max are significantly delayed. Last week, customers could expect to wait 37 days for delivery, according to Counterpoint, the longest wait time since the models launched. Apple’s regular iPhone 14 is still in stock.

In a separate note out Monday, Wedbush analyst Dan Ives predicted major iPhone shortages due to China’s “head scratching zero-Covid policy.”

“We estimate that Apple now has significant iPhone shortages that could take off roughly at least 5% of units in the quarter and potentially up to 10% depending on the next few weeks in China around Foxconn production and protests,” Ives said in a note to investors.

JPMorgan was more optimistic in a note published Sunday, but still expressed concerns over the slowdown in China. “The ongoing challenges around delays in returning to a normal level of production at the Zhengzhou facility could limit the pace with which supply-demand equilibrium can be reached in the coming months, but supply appears to have rebounded from trough levels,” the firm wrote.

— CNBC’s Michael Bloom contributed to this report.

Security remains tight in Beijing, Shanghai as Covid protests simmer


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