Main Apple factory is locked down
Apple has told expectant iPhone customers that deliveries of their new devices could take some time after China's draconian Covid lockdown measures were instigated in the world's largest iPhone factory, causing it to be closed.
Apple announced that its production facility in Zhengzhou, China, is now only working at a massively reduced capacity after officials shuttered the factory and surrounding area on 2 November for one week.
Workers could be seen on social media videos desperately trying to escape the facility before the measures were put in place after one case of covid was reported. It was reported restrictions had been put in place on worker movements several days before the lockdown became effective.
Many workers feared being closed into the factory without provisions or proper heating and being left to fend for themselves. Some could be seen walking for hours to reach their homes or transportation hubs several miles from the Foxconn plant.
It comes as China defiantly, and some say foolishly, continues to attempt to stamp out the virus with their "zero Covid" policy, introducing harsh and widespread lockdowns even when outbreaks are minor – such as the one infection at Foxconn.
"As we have done during the Covid-19 pandemic, we are prioritizing the health and safety of all workers in our supply chain," said Apple, which introduced its new iPhones just two months ago.
"We continue to see solid demand for iPhone 14 Pro and iPhone 14 Pro Max phones. However, we now expect fewer iPhone 14 Pro and iPhone 14 Pro Max deliveries than we previously forecast and people will experience extended wait times to receive their new devices."
The news will likely disappoint investors who were counting on China lifting its Covid restrictions sometime soon. Chinese stock markets had risen on Friday on rumors of lockdowns ending.
Beijing's uncompromising approach to stopping the spread of Covid has come at a massive economic cost. However, the president of the People's Republic of China, Xi Jinping, personally endorsed the policy, so it is unlikely he will admit it is not working. Moreover, he has offered no hope that anything will change in the near future.
The latest figures show the world's second-biggest economy struggling to cope with never-ending challenges caused by unrelenting Covid restrictions, disaster in the property sector, and the possibility of a worldwide recession
Monday's Chinese trade figures showed imports and exports shrunk unexpectedly in October. It is the first drop and the worst performance since May two years ago. Outbound shipments for the month fell 0.29% from the year before, in contrast to a 5.68% gain in September.
The country reported over 5,600 new Covid infections on Sunday, its highest daily count in half a year. Zhengzhou, where the Foxconn factory is situated, has close to 10 million residents and added over 3,600 cases and more than 20 deaths on Monday.
Cases were also reported inside Foxconn, prompting the sudden lockdown that led to workers fleeing the plant. On Monday, Taiwan-based Foxconn began a recruitment drive and is offering workers who fled the factory a one-off bonus of 500 yuan (US$70) if they return to work.
A statement posted on Foxconn's recruitment WeChat account stated it also proposes a 30 yuan ($4) pay increase an hour.
The world's largest contract electronics manufacturer has scaled back its fourth-quarter outlook because of the Covid lockdown measures. The last quarter is usually a hectic time for Foxconn as demand for electronics rises ahead of the Christmas holiday season.
The company said they are working with the local provincial government to stamp out the pandemic and bring production back to full capacity as soon as possible.
Production from Foxconn, formally known as Hon Hai Precision Industry, makes up over two-thirds of global iPhone shipments.