Home Business How the coronavirus affects the Apple gadget market and production

How the coronavirus affects the Apple gadget market and production

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If you’re waiting to buy the new, less costly iPhone expected to hit shelves in March, you might be waiting longer than you thought.

Come February, Apple had planned to ramp up production of its cheap successor to the iPhone SE—variously referred to as iPhone 9 and iPhone SE2—by up to 10 percent. Then, the SARS-like Coronavirus broke out across Wuhan, China, putting Apple’s Asian production facilities in a bind. Now, executives tell Nikkei Asian Review the company’s production schedule is facing “massive uncertainties.”

Apple informed suppliers in China it wanted to produce up to 80 million iPhones during the first half of 2020, representing about a 10 percent increase. According to the report, about 65 million of those orders are for older iPhones, while the other 15 million are for the forthcoming iPhone SE successor. In addition to iPhones, Apple also planned to hike up AirPods production by 45 million units due to demand.

Suppliers warned the company that the neck-breaking pace of production would almost certainly be complicated by the coronavirus outbreak in China’s Hubei Province, since Apple’s primary production facilities there are in nearby Henan and Guangdong provinces.

“The [coronavirus] situation in China could affect the planned production schedule,” one supply chain executive told Nikkei. That person’s trip to China was postponed due to the outbreak.

Here’s where it gets weird, though. Foxconn, the Taiwanese electronics behemoth that produces iPhones in China, said it would not be closing down any of its factories as a result of the Wuhan coronavirus outbreak, nor would it be changing manufacturing timelines. The company said that it was “closely monitoring” the Wuhan coronavirus spread.

“Foxconn is closely monitoring the current public health challenge linked to the coronavirus and we are applying all recommended health and hygiene practices to all aspects of our operations in the affected markets. Our facilities in China are following holiday schedules and will continue to do so until all businesses have resumed standard operating hours,” the company said in full. The “holiday” Foxconn is referencing the Chinese government’s extended Lunar New Year, which is actually a measure meant to help mitigate the spread of the virus.

“As a matter of policy and for reasons of commercial sensitivity, we do not comment on our specific production practices,” the company added. “But we can confirm that we have measures in place to ensure that we can continue to meet all global manufacturing obligations.”

While it’s not clear exactly what Apple is up against, the Wuhan Coronavirus is certainly deadly. As of Thursday afternoon, the number of cases across the globe has skyrocketed to 9,700.

YAHOO.COM

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