Apple shares reportedly sank yesterday (28 November 2022). The news was revealed after a few reports stated that the production of the iPhone Pro might fall short by around 6 million units this holiday season.
Bloomberg has reported the ruckus at Zhengzhou (China) which is a key manufacturing hub for Apple, which is expected to lead to a massive shortfall of its signature handset- the iPhone, citing an unnamed source.
The reports have confirmed the earlier estimates from Morgan Stanley, an American multinational investment management and financial services company; and Wedbush, which is a privately held investment firm. The estimate has stated that the iPhone Pro models are falling short in their production goals for this holiday season 2022.
Wedbush analysts have said in research that they have estimated the shortages which could reduce the number of iPhones sold in the last quarter of the year, which will be by 5% to 10%. The analyst said, "In many Apple stores we are seeing major iPhone 14 Pro shortages of up to 35%-40% of typical inventory heading into December with online channels pushing deliveries into early January in many cases,"
When asked Apple about the news, the tech giant did not respond to the concern. Shares of Apple fell down $4.34, or 2.9%, to $143.78 in the afternoon trading yesterday.
Why the production problems?
We are very much aware of the rising COVID-19 cases in China which have slowed down the work at Foxconn, the manufacturer that assembles iPhones in China. Also, the residents in China have been reportedly protesting because of the shutting down of residential and businesses because of the nation's "zero-COVID" policy.
Wedbush analyst further said, "With the 'head scratching' zero-COVID policy in China now reaching a tipping point and protests across the country, Apple is essentially caught in the cross-fire heading into the all-important Christmas time period."
A dispute was highlighted last week over pay at the company's factory in Zhengzhou where the employee protested and further leading to a police showdown and some protestors were reportedly even beaten.
What can Apple do?
Apple is expected to still work on increasing production in the coming weeks for trying to make up some of its shortfalls, as Wedbush noted.
The analyst has said, "Now it's the painful waiting game to see what ramped production looks like over the next week for Apple to ease some iPhone shortages that are building globally," the analysts said.