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Investment bank Piper Sandler expects Apple and Foxconn to catch up iPhone 14 Pro production in December, but will still be about nine million iPhones short.
Although China has now lifted the latest COVID lockdown in Zhengzhou, Foxconn’s major iPhone factory is there significantly behind on the production of the iPhone 14 reach. In a note to investors seen by AppleInsiderPiper Sandler says it generally “continues to believe that Apple will continue to be a formidable brand.”
Although it cut its estimates for Apple’s December revenue by $8 billion, it still rates the company as Overweight, despite our temporary reduction due to contingencies.”
“We are lowering our estimates for Apple primarily due to supply chain concerns surrounding unrest at the Zhengzhou factory,” the note says. “It was common knowledge that given China’s zero-Covid policy, there have been major disruptions at this factory.”
“We know that Foxconn’s Zhengzhou factory is the main hub for iPhone production with more than 50% [of] assembled iPhones coming out of this factory,” continues Piper Sandler. “We believe most of the outages occurred in the month of November, where factory utilization may have dropped to 50% or less.”
Making up for production delays
Foxconn has moved some of its iPhone production to India, but analysts at the investment bank don’t see it as significant. “[In] in our view, India still accounts for less than 5% of total iPhone 14 production and is likely to only help to a limited extent at this time,” it read.
However, the company does expect Apple to “do its best to catch up with some production in December”, as well as “prioritize production of the iPhone 14 Pro over other models”.
Separately, Piper Sandler also conducts a biennial survey of teens, which also asks about plans to buy iPhones. The latest edition in October 2022, it was found that 88% of teens plan to buy.