Kuo: iPhone 14 Pro Sales to Drop Due to Foxconn Factory Protest

2 months ago 59

Kuo: iPhone 14 Pro Sales to Drop Due to Foxconn Factory Protest

BY Dave Johnson

Published 29 Nov 2022

Foxconn

According to analyst Ming-Chi Kuo, iPhone 14 Pro and iPhone 14 Pro Max sales will be lower than projected in Q4 of 2022. It’s reportedly due to the labor protest at Foxconn’s main iPhone factory in China.

Last week, several footages of hundreds of Foxconn employees matching in protest and clashing with the local police surfaced on the web. Indeed, the live-streamed videos show the factory workers’ confrontations with people in hazmat suits. 

Expectedly, the unrest at the factory in Zhengzhou could impact the iPhone 14 Pro and iPhone 14 Pro Max sales globally. 

According to Kuo, the protest over unfavorable working conditions has significantly affected iPhone production at the Foxconn plant. As a result, the analyst reduced his iPhone shipments forecast for Q4 of 2022 by 20 percent — roughly 70 to 75 million units. That’s slightly lower than the market consensus of 80 to 85 million units. 

The Zhengzhou plant is Foxconn’s largest ‌iPhone‌ factory, with up to 200,000 employees. Yet, the company has struggled to keep workers on site due to the stringent COVID-19 restrictions in China. 

Although the factory’s average utilization rate was about 20 percent in November, Kuo says it could improve to 30-40 percent next month. The analyst further notes that Foxconn has outsourced 10 percent of its iPhone 14 Pro and iPhone 14 Pro Max orders to Luxshare and Pegatron. However, we’re unlikely to see mass shipment until later in the year. 

So how will the production issue impact sales? 

iPhone 14 Pro Sales Could Be Lower than Consensus

Kuo is confident that the Foxconn factory issue could result in a 20 to 30 percent lower iPhone revenue than the market expected this quarter. 

Due to the shipping delay and a looming recession, potential buyers are unlikely to defer the purchase of the iPhone 14 Pro models. Instead, Kuo believes that demand for the Apple flagship device will simply fade before the end of the year. 

Individuals looking to buy the iPhone 14 Pro lineup on Apple’s online store in the U.S. must wait for at least four weeks to get the device. What’s more, that may not change until late into December, says Kuo. 

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