The labor protests at Foxconn's Zhengzhou plant could bring Apple's 14 consecutive quarters of growth to an end.

(Reuters)

[Compile Wei Guojin/Taipei Report] The Financial Times reported that China’s zero-clearing measures and the labor protests at Foxconn’s Zhengzhou factory may bring Apple’s 14 consecutive quarters of growth to an end at the peak of the holiday shopping season, investment bank DA Davidson analyst Tom Forte pointed out , "Apple's biggest challenge is that the speed of diversification from China to production lines is not fast enough." More than 95% of iPhones are assembled in China, and it will take several years to transfer production lines from China to India, Brazil and Southeast Asia.

Foxconn has transferred some iPhone production to other factories in China, but it is still difficult to make up for the reduced production at the Zhengzhou factory. According to research firm Counterpoint Research, the waiting time for delivery of high-end iPhone 14 Pro and Pro Max has been extended to 37 days, compared with 1 Almost doubled a month ago.

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On the 28th, Evercore ISI lowered Apple's revenue forecast for this quarter by US$8 billion to US$122 billion. This will be a full US$2 billion decrease from Apple's US$124 billion in revenue a year ago. Year-on-year decline.

The situation at Foxconn's Zhengzhou factory is still unstable.

According to estimates from Visible Alpha, analysts predict that Apple’s net profit will shrink by 6.2% to US$2.5 billion this quarter, which will impact the production of 8 million to 10 million iPhones.

Beijing's zeroing measures have sparked labor protests at Foxconn and highlighted the vulnerability of Apple, which is losing $1 billion in iPhone sales per week, according to Wedbush Securities.

Evercore analyst Amit Daryanani said, "We believe that the Zhengzhou factory has been operating at a utilization rate of 60% to 70% for the past month." It is estimated that the supply of 5 million to 8 million iPhones will be limited.

He pointed out that the continued anti-zeroing protests in China will weaken demand in China, which accounts for one-fifth of Apple's revenue.

He said, "China's protests against the blockade are getting more and more intense, so it is entirely possible that the situation will get worse and even hurt end demand."

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