Problems with the iPhone 14 are increasing at Apple. While there is hardly any demand for one model, others have long delivery times.
It currently takes about a month for an iPhone 14 Pro or 14 Pro Max to be delivered by Apple. As in 2021, this could mean problems for the Christmas business. There are a number of reasons for the scarcity.
Lockdown at Apple’s largest supplier Foxconn
According to an insider, the problems at the Chinese Apple supplier Foxconn as a result of the corona restrictions could significantly affect iPhone deliveries in November. Measures to contain the virus could cut production of smartphones at the plant in the Chinese city of Zhengzhou by up to 30 percent, a person familiar with the matter told Reuters news agency on Sunday. Foxconn is therefore working on expanding production at its factory in the southern city of Shenzhen. The impact on production comes amid the traditionally busy pre-holiday season for electronics manufacturers. For Apple, this could mean delivery problems, especially for the popular Pro models of the iPhone 14.
Around 200,000 workers are employed at the Zhengzhou site. Because of China’s extremely strict zero-corona policy, workers’ dissatisfaction has increased in recent days. Many left the factory over the weekend and made their way to their hometowns, photos and videos posted on Chinese social media show.
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Continuing semiconductor shortages
Apple is one of the few US technology companies to exceed market expectations in terms of quarterly earnings. The electronics group mainly owed this to a surprisingly strong demand for classic computers. The revenue generator iPhone, on the other hand, weakened.
Revenue from the sale rose to $42.6 billion at the end of fiscal 2021/2022, the group said. This is a record value for a fourth quarter. Analysts had hoped for just under a billion dollars more. Thanks to a new generation of MacBook Air and MacBook Pro models, Apple took in 11.5 billion dollars with desktop computers and laptops, a good two billion more than expected.
“We performed better than expected, although exchange rate effects were a significant drag,” said Apple CFO Luca Maestri. He put this at ten percent. He also pointed out that part of the boost in the computer business was due to catch-up effects. A factory that produces Macs had previously been down for a long time.
Despite the strong numbers, Maestri was cautious about the future prospects. He warned of a decline in group sales for the current quarter. “Apple, along with other companies, is suffering from the strains of the economic environment and ongoing supply chain problems,” said analyst Jesse Cohen of online brokerage Investing.com. However, the management masters the difficulties better. Apple already had 2021 due to the chip shortage massive delivery problems with the iPhone 13which could now be repeated on the iPhone 14.
Demand for iPhone 14 Plus overestimated
According to market research company TrendForce, Apple is cutting production of its iPhone 14 Plus due to low demand. The production of the more expensive iPhone 14 Pro model, on the other hand, should be increased from 50 to 60 percent of total production, TrendForce reported. Amid the chip crisis and a sluggish period for smartphone sales, the US tech giant’s focus on premium devices could help it generate higher profit margins.
The miscalculation of demand is already causing the iPhone 14 Pro models to have significantly longer delivery times than the iPhone 14 and iPhone 14 Plus. The two cheaper models are available within two days. Pro and Pro Max, on the other hand, currently have a waiting period of almost a month. The increase in iPhone 14 Pro and 14 Pro Max production could be too late for the holiday shopping season.
With material from Reuters
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