Apple says China’s shutdown of “iPhone City” has led to “significant reduced capacity” for the holidays

Apple Inc. said shipments of its latest high-end iPhones will be lower than previously expected after a lockdown in China affected operations at a supplier’s factory.

The company continues to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models, but the shutdown means “customers will experience longer wait times to receive their new products,” Apple said in a statement on Sunday. Shipments of iPhone 14 Pro handsets are currently slated for late November or early December, according to Apple’s website.

The Chinese government’s sudden move last Wednesday to close the area that includes Hon Hai Precision Industry Co. plant to nov. 9 is expected to further disrupt a plant already struggling with a local coronavirus outbreak, worker evacuations and enforced quarantines.

Apple said the facility was operating at “significantly reduced capacity,” while Hon Hai noted in a separate statement that it was lowering its outlook for the fourth quarter to factor in the shutdown.

The local government has ordered people and vehicles off the streets except for medical or other essential reasons, a ban that threatens to halt the flow of additional workers and components needed to ramp up production ahead of the holiday.

The moves could add to the headaches already facing Foxconn and Apple as iPhone sales slow in China. Apple, the world’s most valuable company, said last month that it expects growth to slow in the current period.

The Cupertino, California-based company did not provide a separate earnings forecast for the current quarter, continuing the approach it adopted at the start of the Covid-19 pandemic. But analysts estimate sales of about $128 billion, which would be a historical record.

Faced with slowing growth, Apple has paused hiring for many non-R&D jobs, an escalation of an existing plan to cut budgets next year, Bloomberg said last week, citing people with knowledge of the matter.

Meanwhile, Foxconn’s factory continues to operate within a “closed loop,” or self-contained bubble that limits contact with the outside world. It’s keeping some production going.

Apple said on Sunday it was working closely with its supplier to return to “normal production levels while ensuring the health and safety of every employee.”

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