Morgan Stanley analysts have updated their iPhone Pro shipments forecast for the current quarter to reflect interruptions in production at the Zhengzhou plant in China. Zhengzhou is the main manufacturing center that makes iPhones. Due to COVID-19, the production of older models will likely be cut by 6 million units.
In total, factories that produce older iPhones are predicted to ship 79 millions smartphones rather than 85 million. This is referring to variants of the iPhone 14 Pro Max and 14 Pro Max that were assembled in this Chinese Foxconn factory. Due to a manufacturing crisis at Foxconn, Apple will likely reduce shipments.
Premium smartphones had been seen previously as being resilient to market downturns and maintained strong sales momentum. In percentage terms, demand for entry-level and mid-range devices from companies such as Oppo, Vivo, and Xiaomi saw a double-digit drop in demand. Even iPhones of non-Pro series suffered. This is because Pro models are particularly important to Apple and Zhengzhou’s production disruptions can be even more devastating than they could.
Morgan Stanley says that the lead times for iPhone 14 Pro Max and 14 Pro Max shipments have increased to 4-5 Weeks from 2-4 Weeks a month ago. This is due to strong demand and some shortages. The financial company’s analysts expect that supplies will be adjusted in the first month of 2023 because of unsatisfied demand for 2022. For Apple and Foxconn, the key to success is uninterrupted production in Zhengzhou.
Local authorities in Zhengzhou organized for workers to be brought into the Foxconn facility to assist the manufacturer with its return to full-scale operations over the weekend.
Barron’s analysts made a pessimistic forecast the other day. They reduced the iPhone shipments forecast for the current quarter by 8,000,000 units, which includes the iPhone 14 Pro/Pro Max, by 5 million units. Similar forecasts were made in the JP Morgan report.