The recent wave of labor demonstrations has negatively impacted Apple. According to a recent report, this is a result of the workplace turmoil at the Chinese iPhone manufacturing in Zhengzhou. Analyst Ming-chi Kuo says shipments in 4Q22 for iPhone 14 Pro models would be 15-20 million units lower than anticipated.
Due to the fact that a sizable portion of Pro smartphones is produced in the Zhengzhou factory, the shortfall has notably affected models of the iPhone 14 Pro and iPhone 14 Pro Max. Kuo is the most recent analyst to warn that demonstrations over compensation and severe COVID-19 limitations at the world's largest iPhone manufacturer, the Foxconn-operated facility in the center city of Zhengzhou, could harm the most valuable firm in the world.
"The total iPhone 14 Pro and 14 Pro Max shipments in 4Q22 will be 15-20 million units less than expected," Kuo stated in a tweet. "Significant downside risks to Apple & iPhone supply chain due to Zhengzhou iPhone plant labor protests."
He reduced his forecast for quarterly iPhone shipments by nearly 20%, to between 70 million and 75 million units, versus the 80 million to 85 million units predicted by the market. As concerns about shipments during the crucial holiday shopping season rise, Apple share prices are currently down more than 2%, on track to add to the 6% fall so far this month.
In a blog post published on Tuesday, Kuo also asserted that since consumers are already dealing with a deteriorating economy, the lack of supply may actually eliminate the demand for the more well-liked Pro versions rather than postpone sales. Other Apple analysts, though, predict that when production limitations ease and more Pro models become available, sales will increase.
"We note that Pro devices are sold out into early January, but we expect some of the missed revenue to trickle in the March quarter," CFRA Research analyst Angelo Zino said. The restrictions are the most severe since the early stages of the epidemic and are occurring at the worst conceivable time, according to Zino.
China chose to impose a lockdown in a number of Zhengzhou districts shortly after the worker protest. However, five days after it was announced, the lockdown was lifted on Wednesday. Due to fewer employees, things could still be bad at the Foxconn factory in China. Following the protests last week, about 20,000 employees departed the Foxconn site. The schedule for making iPhones might be further hampered by this.