Coronavirus Outbreak to Continue Impacting Apple's iPhone Production Into April
Ongoing delays from the coronavirus outbreak in China will likely cause Apple to miss its schedule for mass producing the low-cost iPhone, and inventories of existing models could remain low until April or longer, according to new information shared today by Japanese site Nikkei.
iPhone suppliers, on average, are said to be operating at 30 to 50 percent capacity at the current time, and to ramp up to full production, hurdles that include labor shortages and transportation logistics need to be overcome.
Apple was planning to begin mass production on the upcoming low-cost iPhone in February, but sources that spoke to Nikkei said that meeting that target is "very challenging" and production could be delayed until March.
Current rumors have suggested Apple plans to unveil the new iPhone at an event that's set to take place in March, perhaps on March 31, with Apple then releasing the device on April 3. Though there are issues with production, multiple sources have said the new iPhone is still going to launch on time.
"The suppliers are doing their best to produce and ship the [cheaper] iPhone within four weeks. ...The delay can't be too long, otherwise it will affect the sales strategy of Apple's new products in the second half of this year," one of the people, who has direct knowledge of the matter, told Nikkei.
Apple was hoping to have its suppliers produce 80 million iPhone units in the first half of 2020, including 15 million low-cost iPhones, but the company's production plan is now uncertain. Apple yesterday said that it will not meet its revenue goals for the March quarter due to constrained iPhone supplies and low customer demand for Apple products in China amid the outbreak.
Factories in China are counting on having more employees back at work as soon as next Monday, when a quarantine period for those who returned from outside provinces will end. Travel logistics are said to be a "major headache" at the current time, as suppliers need to change truck drivers when crossing provincial borders due to quarantine requirements.
The coronavirus has infected more than 73,000 people, and there have been 1,870 deaths, primarily in China.