Analyst Paints Gloomy Picture For Apple's iPhone Holiday Shipments

It would be an understatement to say that 2022 has been a tumultuous year for Apple. This year saw Apple deal with multiple issues with its contract manufacturing plants scattered across China. Trouble at Apple's iPhone plants in China began in early 2022 following a resurgence in the number of COVID-19 infections in the country. This wave of infections resulted in lengthy lockdowns and factory closures, which led to Apple's contract manufacturers being unable to meet their production targets. While most analysts expected the surge in COVID-19 cases to plateau towards the end of 2022, that has yet to happen. On the contrary, things seem to have only taken a turn for the worse — with several cities across China still under strict lockdown, according to the BBC, as we approach December of 2022.

One of the factories affected by these lockdowns includes Apple's largest iPhone manufacturing facility in Zhengzhou. Foxconn assembles most of Apple's flagship-grade "Pro" iPhone models at this plant. While the Zhengzhou iPhone factory was already affected by government-mandated lockdowns, things took a turn for the worse earlier this month after violent protests broke out in the Foxconn factory over concerns about low wages and food shortages. Even before the protests broke, Apple had indicated that consumers might face trouble getting a new iPhone this holiday shopping season. Following the protests, however, Apple could be looking at even worse shipment numbers than initially thought.

In the days following the violent protests at the Zhengzhou plant, several reports talked about its potential impact on iPhone shipments. Bloomberg estimated that Apple could end up with a little over 6 million lesser iPhones in 2022 on account of these disruptions. However, a new report by noted Apple analyst Ming-Chi Kuo paints a much grimmer picture. Kuo says he is lowering his estimates for Q4 2022 iPhone shipments by more than 20%. In sheer numbers, this would mean that Apple may end up shipping anywhere between 15-20 million lesser iPhones in Q4 2022, compared to last year. Kuo had earlier talked about the likelihood of Apple shipping anywhere between 80-85 million iPhones in the last quarter of 2022. However, he has lowered that number to 70-75 million units because of recent developments.

In his research note, Kuo also adds that the Zhengzhou iPhone plant could only operate at 20% capacity during the entirety of November 2022. However, he expects Apple and Foxconn to speed up the pace of manufacturing and reach at least 35-40% capacity by the end of December. Kuo also estimates Apple's revenue figures will take a hit on account of this iPhone shortage. While issues at Foxconn's Zhengzhou plant may draw to a close in the next few months, Apple is increasingly looking at countries other than China as potential iPhone-manufacturing locations. One of these nations happens to be India — where Apple already operates two iPhone factories. If Apple's plans succeed, the company could rely on manufacturing facilities in India to handle 25% of the global iPhone production by 2025.