Apple announces that COVID restrictions are impacting iPhone manufacturing
Apple on Sunday released a press release to its Newsroom site titled, “Update on supply of iPhone 14 Pro and iPhone 14 Pro Max.” It’s a short release, so I’ll include it in its entirety (minus the legal copy):
COVID-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China. The facility is currently operating at significantly reduced capacity. As we have done throughout the COVID-19 pandemic, we are prioritizing the health and safety of the workers in our supply chain.
We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.
We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker.
A few things jump out at me. First, it’s worth noting that this is a severe enough impact on production that Apple felt the need to actually address it, and in a full press release rather than in a comment to a trusted journalist. Apple mentions that the production impacts are temporary, but doesn’t say how long the impacts will last. (I did a quick look at Apple’s online store and configured an iPhone 14 Pro with the base storage. The ship time estimate is December 8-14.)
The second thing that jumps out at me is that Apple cites “COVID-19 restrictions,” but doesn’t say in the release whether those are Apple-imposed restrictions, Foxconn-imposed restrictions, or Chinese State-imposed restrictions, though there’s reason to believe it’s the latter, at least in part. Reuters released a piece on November 2 titled, “China imposes fresh lockdown around major Apple iPhone plant.” That piece states:
China ordered an industrial park that houses an iPhone factory belonging to Foxconn (2317.TW) to enter a seven-day lockdown on Wednesday, in a move set to intensify pressure on the Apple supplier as it scrambles to quell worker discontent at the base.
The Zhengzhou Airport Economy Zone in central China said it would impose "silent management" measures with immediate effect, including barring all residents from going out and only allowing approved vehicles on roads within that area.
Whatever you think of the U.S. response to COVID, I hope we can all agree that the Chinese government’s lockdowns have been particularly cruel and brutal. I hope some sanity prevails there sooner rather than later. I think Apple’s approach to managing COVID among its own staff and U.S. locations was overly conservative, but I’d still rather see Apple guiding the response to the lockdowns in its partner manufacturing sites than the Chinese State.
So should Apple move more manufacturing to other countries? To me it’s complicated. I think it’s good that Western companies do business in China, for the most part. There’s that old maxim that if goods don’t cross borders then guns will. And there’s (in my view) far too much saber rattling between the American and Chinese governments. I think there are great benefits to Apple doing business there. That said, I do think Apple needs to diversify where it manufactures its products as much as possible to ensure fewer delays like the one imposed here by the Chinese government.