Apple suppliers warned that the Wuhan coronavirus affect could Apple. The over 10% increase vs. last year’s iPhone production that Apple recently requested could be complicated by the outbreak of the Wuhan coronavirus in China, given that their main manufacturing centers are in nearby Henan and Guangdong provinces, with more than 150 confirmed cases in those areas of Monday afternoon.
Cheng Ting-Fang and Lauly Li for Nikkei Asian Review:
Apple, which reports fourth-quarter results after Tuesday’s U.S. market close, has booked orders for up to 65 million of its older iPhones, mostly from the iPhone 11 series, and up to 15 million units of a new cut-price model that it plans to unveil in March. Apple ordered some 73 million iPhones over the same period last year, according to GF Securities data.
“This year is much busier than last year,” an industry source said… “The [coronavirus] situation in China could affect the planned production schedule,” one supply chain executive, whose trip to China has been postponed due to the virus, told Nikkei.
Suppliers added that Apple is also boosting production of its AirPods range of wireless earbuds, by up to 45 million unit for the first half of this year. In contrast, Apple sold 60 million units AirPods in all of 2019, according to Strategy Analytics. Apple has over 50% of the global market in the booming wireless Bluetooth earphone segment. However, executives stressed that the coronavirus has created “massive uncertainties and challenges” for production of both iPhones and AirPods.
MacDailyNews Take: In other words, Apple supplier state the blatantly obvious: If travel is restricted and employees fall sick, production could be affected. Duh. And water is wet.
Duh. And I am cynical.
As a man thinks, so he is.
The virus has a good chance of becoming endemic to China resulting in years of impact and disruption.
It’s time to move manufacturing and resources outside of China as well as the region.