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Funding financial institution Piper Sandler expects Apple and Foxconn to meet up with iPhone 14 Professional manufacturing in December, however will nonetheless fall brief by round 9 million iPhones.
Though China has now lifted its newest COVID lockdown in Zhengzhou, Foxconn’s main iPhone manufacturing facility there may be considerably behind on its manufacturing of the iPhone 14 vary. In a observe to traders seen by YourNextApp, Piper Sandler says that general, it continues to “consider that Apple stays a formidable model.”
Whereas it’s reducing its estimates for Apple’s December quarter income by $8 billion, it nonetheless charges the corporate as Chubby regardless of our momentary discount from unexpected occasions.”
“We’re decreasing our estimates for Apple primarily from provide chain fears round turmoil within the Zhengzhou plant,” says the observe. “It has been on the forefront of public information that given China’s zero Covid coverage, there have been main disruptions at this plant.”
“We all know that Foxconn’s Zhengzhou plant is the principle hub for iPhone manufacturing with larger than 50% [of] assembled iPhones coming from this plant,” continues Piper Sandler. “We consider that almost all of the disruptions occurred within the month of November the place utilization for the plant might have fallen to 50% or under.”
Catching up with manufacturing delays
Foxconn has moved some iPhone manufacturing to India, however the funding financial institution’s analysts do not see that as vital. “[In] our opinion, India nonetheless accounts for lower than 5% of complete iPhone 14 manufacturing and is probably going to assist solely to a restricted diploma right now,” it says.
The corporate does anticipate that Apple “will strive its greatest to catch as much as a few of the manufacturing in December,” although, and likewise “will prioritize iPhone 14 Professional manufacturing over different fashions.”
Individually, Piper Sandler additionally undertakes a biannual survey of youngsters that features asking about plans to purchase iPhones. The most recent version in October 2022 confirmed 88% of youngsters intend to purchase.