Apple (NASDAQ: AAPL) is reportedly speeding up its plans to shift iPhone production away from China following worker protests as a result of Covid regulations at the largest iPhone factory in the world.
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The Wall Street Journal reported over the weekend that Apple is looking at moving iPhone production to other countries in Asia, such as India and Vietnam, in an attempt to reduce dependency on iPhone manufacturers such as Foxconn, which owned the plant in Zhengzhou.
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The factory hit the headlines in recent weeks with workers protesting Covid-related regulations. Videos online showed workers protesting, with some confronted by security personnel in hazmat suits and riot police.
Following the protests, Bloomberg reported that Apple might miss its production target for the iPhone 14 Pro models by around 6 million units globally. From my own view, Apple seems to be having at least some issues, even if the data is minuscule. When asking a couple of stores about the iPhone 14 Pro this weekend, I was told they are not currently available.
Meanwhile, Piper Sandler analyst Harsh Kumar lowered forecasts for Apple primarily based on iPhone supply concerns. Kumar cut his revenue forecast for the December quarter to $119 billion from $127.3 billion, assuming a decline of 9 million handset units primarily for the new models produced in November. However, the analyst added that Apple “remains a formidable brand” and reiterated an Overweight rating on the shares with a $195 price target.
It was also recently reported that Foxconn itself may look to move work outside of China.
The Wall Street Journal said it is unclear when Apple will be able to fully move away from its dependence on China, but it is said to be telling suppliers to plan more actively to assemble parts elsewhere. In addition, it may look at using a larger pool of manufacturers, even within China, in order to avoid the recent challenges.
The move comes following a few years of issues stemming from the coronavirus pandemic and strained relations between the US and China.
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