Analyst sees "major shortage" of iPhone 14 series handsets in the states

Analyst sees "major shortage" of iPhone 14 series handsets in the states
According to CBS News, Wedbush analyst Dan Ives is telling clients that there is a severe shortage of iPhone 14 series handsets as the holiday shopping season kicks off today, Black Friday. In a note sent to Wedbush customers today, Ives said, "We believe demand for iPhone 14 units into the all-important Black Friday holiday weekend is way ahead of supply and could cause major shortages leading into (the) Christmas season."

CBS News is blaming the shortage on the resurgence of COVID in China which has led Chinese officials to order a crackdown in certain areas including Zhengzhou. That is where Foxconn's largest iPhone manufacturing facility is located. On Friday, mainland China reported a record number of COVID infections for the second consecutive day. Foxconn laid down some restrictions in an effort to prevent COVID from spreading such as requiring all meals to be consumed inside workers' dorms instead of a dining room.

Some workers were unhappy with the COVID crackdown and escaped the factory's campus leaving Foxconn with a shortage of workers during its busiest time of the year.

Needing to have enough employees to man the iPhone assembly lines just weeks before Christmas, Foxconn offered new workers bonuses to sign up and China even called on military vets and Communist party members to recruit personnel for Foxconn, the country's top employer, and taxpayer. But then, after violence broke out at the Zhengzhou facility on Tuesday night, the company paid 20,000 employees to quit and go home.

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Foxconn workers were roughed up by security guards as employees were worried about catching COVID from older workers. They also claimed that the pay package they were promised was changed at the last minute. Foxconn apologized for the incident and blamed a technical issue for the mix-up over pay.

Ives wrote in his note, "The zero-COVID China shutdowns in Foxconn have been a major gut punch to Apple this quarter and we believe have taken roughly 5% of iPhone 14 units out of the supply chain and thus putting Cupertino in a 'major shortage' heading into the next month." The analyst expects Apple to sell 20% fewer iPhone units over the Black Friday weekend. Instead of the 10 million handsets it sold during the Black Friday weekend last year, Ives says this year Apple will sell 8 million instead.

The analyst also wrote, "If Zhengzhou remains at lower capacity the next few weeks and continues to see the unrest build with workers, this would cause clear major iPhone Pro shortages into the all-important Christmas time period, especially in the U.S." The factory in Zhenzhou reportedly is responsible for more than 50% of global iPhone production. Foxconn is also Apple's most important iPhone supplier as it is expected to produce 70% of all iPhone units assembled this year.

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