Apple: iPhone collapse in China? Employees flee, demand collapses

Apple published relatively good numbers on Thursday night and closed Friday about 7.6 percent higher, its biggest daily gain since April 2020. The debate about the supply and demand of the latest generation of iPhone is not over, on the contrary: the risk of new problems in China . Production of , iPhones at Foxconn, one of Apple’s largest factories in Zhengzhou, China, could drop by as much as 30 percent next month. Reuters news agency warns against this, citing a person familiar with the matter. The reason for this is the tightening of corona measures there. The Chinese government still follows a „zero-Covid policy” and does not hesitate to quarantine entire metropolises. Some workers from the Zhengzhou Foxconn factory have already fled over the weekend, fearing a further tightening of measures and a worsening of conditions. Videos of workers leaving the factory are circulating on social media. You can see how people sometimes climbed over the fences and fled across the fields with suitcases and belongings. Extremely bad conditions have already been reported in recent days after strict corona measures were introduced in the districts. Therefore, employees were no longer allowed to leave the site, but had to continue working. Workers also complained of problems with food supply. The city government later issued a statement, according to which the Taiwanese company Foxconn promised to improve the living and working conditions of all workers who decided to stay there. Regular transportation must be arranged for others. According to another source, many workers remained in the factory and continued their production there. In addition, production at Foxconn’s other factories is streamlined to minimize impacts. It doesn’t come without losses, however, as Zhengzhou, with about 200,000 workers, typically handles about 70 percent of global iPhone production, Reuters reports. , iPhone sales in China fell 27 percent compared to the week of , , but the problem is not just iPhone shipments just before the start of the important Christmas business. The current Chinese demand data does not paint a very friendly picture either. According to investment bank Jefferies, sales fell again last week for the third week in a row and particularly significantly, by 27 percent. The trend corrected for the earlier start of sales is also negative, and according to analysts, demand has recently decreased more than competitors. Apple has so far defied the weak development of the global smartphone market with relative success, and in some cases even increased its market share. However, investors and analysts have been concerned for some time that demand for high-end smartphones could decline due to high inflation and a slowdown in spending.

Michael Cooper

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