The coronavirus outbreak continues to affect smartphone production in China – output for the first quarter could drop by as much as 50% – but one new report suggests there’s finally a glimmer of hope for Apple’s extensive iPhone lineup.
Only 10% of the workforce has returned
Reuters claims Apple supplier Foxconn recently gained approval to resume production at its largest iPhone factory, situated in the Chinese city of Zhengzhou, also known as iPhone City. Today’s news comes after the company was forced to delay plans to restart production by one week following the Chinese New Year celebrations because of the coronavirus outbreak.
Around 16,000 people have returned to the factory so far, said one source with direct knowledge of the matter. The number of workers is far from insignificant, but it represents just 10% of Foxconn’s total workforce at the iPhone manufacturing hub.
Executives at the Chinese company are trying hard to negotiate with local authorities about allowing more workers to return and resuming production in other parts of China. So far, though, the talks haven’t been too successful.
The iPhone 11 and iPhone 11 Pro
Foxconn asked for permission to start production at its Shenzhen plant not long ago but the Chinese government denied the request due to hygiene issues. The company is now working hard to improve its virus control measures and satisfy hygiene standards before the next inspection later this week.
The outbreak could severely impact the iPhone 9 launch
The aforementioned Shenzhen and Zhengzhou factories make up the bulk of Foxconn’s iPhone production lines and are responsible for a massive chunk of Apple’s global iPhone supply. As such, further delays will only impact the Cupertino-based company’s smartphone shipments.
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Apple is believed to have built up a stockpile of iPhone 11 and iPhone 11 Pro units over the past few months in addition to older smartphones such as the iPhone XR. This should minimize the short-term impact of recent production issues on supply.
Unfortunately, the same can’t be said about the iPhone 9. It recently entered trial production in China and was scheduled to enter mass production at some point this week with a huge order of 30 million units.
iPhone 9 CAD-based render
However, the lack of active production lines at Foxconn’s factories means its launch could be severely impacted. Apple is expected to unveil the iPhone 9 during the final week of March but may decide to push back the unveiling to accommodate for production issues.
Alternatively, it could choose to announce the smartphone as scheduled but delay the release by a week or two to guarantee a good level of supply if the coronavirus situation continues to cause problems.
iPhone production is expected to drop 10% this quarter
Market research firm Trendforce cut its iPhone production forecasts for the first quarter of 2020 by almost 10% on Monday as a result of the coronavirus outbreak. It now believes iPhone production will total 41 million units between January and March.
Apple itself hasn’t commented on the matter but recently provided a wider-than-usual revenue range for the current quarter because of the uncertainty surrounding the situation.
Rival manufacturers such as Samsung produce the vast majority of their smartphones outside of China, allowing them to avoid severe impact when it comes to assembly. However, a large number of components do still originate in the market and could lead to some impact.
Huawei is arguably Apple’s only major rival with a huge smartphone manufacturing presence in China. According to the company, though, it resumed production on devices last week and operations are currently running normally.
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