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As the lockdown affects the Apple iPhone 14 shipments, Chinese investors are likely disappointed.
Tech giant Apple (NASDAQ: AAPL) has announced a delay in the shipments of the high-end iPhone 14 models due to the Covid lockdown in China. The Chinese government has announced another lockdown across the country, emphasizing its target of zero Covid. On Sunday, the country reported its highest daily tally of Covid infections in six months. It recorded 5,642 new cases. And the nation saw 3,683 cases and 22 deaths on Monday in Zhengzhou, where Apple’s Foxconn factory is located. Notably, the plant has about 200,000 employees. As a result of the persistent outbreaks, the government was forced to lock down the area.
Apple Announces Delay of iPhone 14 Shipments
Apple announced that customers keep demanding the latest iPhones. However, there are lower shipments of the iPhone 14 Pro and iPhone 14 Pro Max models. Also, there would be a delay in the delivery of the new products than “previously anticipated.” It added:
“As we have done throughout the COVID-19 pandemic, we are prioritizing the health and safety of the workers in our supply chain.”
As the lockdown affects the Apple iPhone 14 shipments, Chinese investors are likely disappointed. Before the news, the Chinese stock market had a sharp uptick amid rumors that the Covid lockdowns were about to end. As for the phone maker, the Foxconn facility now runs at a significantly reduced capacity. Reuters reported last month that the tech company could see its phone production fall by 30% due to the stricter measures in place in order to curb the unprecedented disease. Analysts and research firms are beginning to review previous projections on iPhone 14 as Apple experiences lower shipments. TrendForce, a market research firm, cut 2.3 million units off its iPhone shipments forecast for the last quarter of the year. The firm revealed through its investigation that the capacity utilization rate at the Foxconn factory is now around 70%.
The chief global strategist at LPL Financial in North Carolina, Quincy Krosby, noted that “anything that affects Apple’s production obviously affects their share price.” At the time of writing, the company trades down 1.12% to $136.83. The iPhone maker has been declining over time, losing 8.02% in the last 12 months and 22.07% since the year started.
“But this is part of a much deeper story – the uncertainty surrounding the future of the Chinese economy. …These headlines are part of the ongoing saga as to whether there is any truth to the consistent rumors that authorities are discussing whether some of the measures will be lifted in the first quarter,” the strategist added.