The pandemic is resuming as winter sets in in the northern hemisphere and in China, and Chinese officials relax control efforts. The Chinese may suffer even more than iPhone manufacturers.
The epidemic is far from finished for Apple! The situation could become disastrous following a difficult conclusion to the year in which the Chinese government relaxed its containment strategy in some areas, notably Zhengzhou, to fulfill the demand for iPhone manufacture.
A new viral outbreak in China would be a threat to the American giant’s facilities, according to experts in production lines. So, this threat may have a significant impact on iPhone production, possibly creating delays of many months. This makes sense given that 90% of iPhones are produced in China. We now have a clearer understanding of why Apple is compelled to move its smartphone manufacturing out of China. And toward India in particular.
iPhone 14: Will there be longer delays?
So, currently, an iPhone 14 Pro Max ordered today in Europe on Apple Store should only be delivered between January 5 and 12. Yes, it will be too late for Christmas. In addition, the situation is considerably more severe in the United States, according to the Financial Times, which carries the information, and a Swiss bank that performed market research. There is already a 23-day wait between placing an order and receiving a high-end iPhone 14.
For Apple, who traditionally associates the holiday season with sales records. And the best fiscal quarter, this is a disastrous situation. Together with Foxconn, the Cupertino company is making every effort. To shift the manufacturing of its iPhones to other parts of China that are less afflicted by the virus. Additionally, Apple has made sure that the delivery periods of the parts made by its suppliers are shortened.
A supply chain specialist tells the financial daily that the period at the beginning of the year may be characterized by a high rate of absenteeism. Not just in the factories. But also “in warehouses, distribution, logistics, and transport.”
Apple faces a decline of sales
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Apple foresaw significant Christmas disruptions in November of last year. With an anticipated 8% decline in sales as a result of product shortages. These production issues would in fact force the cash machine that is the iPhone to stop. 5 to 15 million iPhones would ultimately miss making up the difference.
Also, some market analysts now think that these sales might not happen. Whereas some of them initially thought they would merely be delayed. This would be especially true in China, which accounts for a fifth of Apple’s revenue. And is the company’s third-most significant market after the United States and Europe. The pandemic epidemic gave the Chinese the opportunity to reevaluate their objectives.
Because of China’s immaturity in the management of Covid, the next two to six months will be crucial for Apple. According to Alan Day, a production chains specialist. Who, among other things, collaborated with the UN on corporate norms to combat the coronavirus. The rest of the world has set standards. But China hasn’t done anything to push businesses to use them, he continued. There can be a high price to pay. However, Apple may not always be the target of our pity.
Indeed, the potential human cost of this “immature” administration is horrifying. Also, according to certain simulations, after the containment restrictions were loosened. A million Chinese people are at risk of dying from Covid throughout the winter. Winter has arrived while the epidemic continues to wreak havoc in China.
Apple’s Annual Revenue
So, in 2022 Apple briefly became the first ever company to achieve a $3 billion market cap. Its annual revenue has also been consistently growing, as is reflected below:
Apple has a bigger cash hoard than Alphabet or Microsoft. In March 2022, Apple reported $202.5 billion in cash and investments. This is 7.4% of all the S&P 500’s cash. This amount is also nearly 4% up from 2021. By comparison, Alphabet presently holds $169.2 billion in cash and investments, while Microsoft has $132.3 billion, or 5% of the S&P 500’s cash pile.