Currently, China (and other countries) are reeling under the outbreak of Coronavirus. Now it has come to light that the epidemic will likely affect the production of iPhone 9 and iPhone SE 2, both the devices are expected to be launched in the first half of this year.
In December 2019, Chinese authorities alerted WHO about numerous cases of pneumonia in Wuhan City, China. In January Chinese authorities confirmed that they had identified a new strain of the virus that didn’t match with any known viruses including SARS. As of now, Coronavirus is responsible for the death of more than 700 people across 17 countries.
As a precautionary measure, China is imposing travel restrictions and some of the workers are asked to stay at home. Analysts believe that this move will potentially affect Apple’s supply chain. In our opinion, the measures are justified especially since Coronavirus can be very deadly if not contained in a timely manner. To make things worse, Apple is asking its suppliers to increase the rate of production.
Suppliers warned that blistering pace of production could be complicated by the outbreak of the coronavirus in China’s Hubei Province, given that their main manufacturing centers are in nearby Henan and Guangdong provinces, with more than 100 confirmed cases as of Monday afternoon, and in Shanghai, with over 50 confirmed cases.
The [coronavirus] situation in China could affect the planned production schedule,” one supply chain executive, whose trip to China has been postponed due to the virus, told Nikkei.
Chinese authorities have put the city of Wuhan under quarantine. In other words, all sort of public transport is suspended and even festive events like Chines New Year was canceled. Nikkei Asian Review reports that the virus has already spread beyond Wuhan to Hubei province which is in close proximity to Apple manufacturing centers. The authorities have already locked down Hubei Province. Things don’t look bright as U.S scientists claim that the virus can affect 190,000 people by Feb 4.
Bloomberg reports that Coronavirus is likely to have no bearing on high-end iPhones that will be launched in September. However, the production of a low-cost iPhone is likely to be hampered.
Supply chain disruption is a worry if employees across Foxconn and other component manufacturing hubs in China are restricted,” said analyst Dan Ives of Wedbush Securities Inc. “If the China outbreak becomes more spread it could negatively impact the supply chain which would be a major investor worry.
Foxconn has commented that it already has set up contingency measures. However, it is very difficult to ascertain the impact Coronavirus will have on iPhone production.