Production issues in China will directly affect Apple share prices, predictions are that revenue growth will fall by 8% in December
Launched in September 2022, the iPhone 14 has seen massive demand over the last few months, but Apple believes that lower shipments might reduce supply. Apple currently expects lower shipments from China amidst the country’s zero-COVID policy.
Low shipment rates can severely affect Apple Christmas holiday sales and cause the tech giant’s revenue growth to decline by more than 8% thus directly influencing its share prices.
Tech businesses around the world are currently affected by high inflation rates and rising production costs, Apple however was performing well due to the massive iPhone 14 demand. Now with production problems ahead, the company has to prepare for losses.
Apple is not the only company that is affected by China’s rigorous zero-COVID policy. Other companies such as Ester Lauder Companies Inc and Canada Goose Holdings have closed down their stores in the country.
“The facility is currently operating at significantly reduced capacity. 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” said Apple while discussing the zero-COVID policy.
The zero-COVID policy aims at locking down many areas in the country to prevent the spread of COVID-19 that has once again gained traction in the country. The country is keeping many areas and neighborhoods under strict lockdowns for months at a time.
Reuters reported that with factories shipping out only limited amounts of iPhones, Apple production can go down to 30% in November. Apple’s main production plant in Central China that employs around 200,000 people has also faced severe effects from the COVID policy.