Following a significant production cut at a virus-blighted plant in China, Apple Inc expects lower shipments of high-end iPhone 14 models, dampening its sales outlook for the year-end holiday season. Heavy demand for the new iPhones has helped Apple remain a rare bright spot in the global tech sector that has been battered by spending cutbacks because of surging inflation and interest rates.
But the Cupertino, California-based company has now fallen victim to China’s rigorous zero-COVID-19 policy, which has already prompted many global entities along with Estee Lauder Companies Inc and Canada Goose Holdings Inc, to shut their stores in China and cut full-year forecasts. Apple stated that the facility is currently operating at significantly reduced capacity.
The officials of the company said they continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. Production of Apple’s iPhones could slump by as much as 30% at one of the world’s biggest factories in November due to tightening Covid-19 curbs in China.
The world’s most valuable company with a market capitalisation of $2.2 trillion forecast in October its revenue growth would fall below 8% in the December quarter. The plant also kicked off a recruitment drive on Monday, offering workers who had left the plant between October 10-November 5 a one-off bonus of 500 yuan should they choose to return. It also advertised salaries of 30 Yuan an hour, higher than the 17-23 yuan a hour base salaries.