Counterpoint Research's new report on delivery times shows Apple's iPhone 14 Pro models are taking longer than ever to arrive in customer's hands because of zero Covid disruptions in China at a key manufacturing plant.
Customers buying Apple's most premium devices in the US this year can now expect to wait as long as 37 days, according to Counterpoint Research, which monitors delivery times every year. That's far higher than the predecessor iPhone 13 Pro family and longer than the initial launch of the current generation. Delivery days are "increasing significantly" for iPhone 14 Pro and Pro Max models across all markets, Counterpoint analysts said. -- Bloomberg
The main issue is zero Covid disruptions and unrest at Foxconn's massive iPhone factory in Zhengzhou, central China.
"The zero China Covid policy has been an absolute gut punch to Apple's supply chain with the Foxconn protests in Zhengzhou a black eye for both Apple and Foxconn.
"We estimate that Apple now has significant iPhone shortages that could take off roughly at least 5% of units in the quarter and potentially up to 10% depending on the next few weeks in China," Dan Ives of Wedbush Securities said.
Bloomberg's breakdown of Apple's supply chain shows that Foxconn (Hon Hai Precision Industry Co., Ltd.) is a top supplier. Any manufacturing disruption in China could leave Apple, AT&T, Best Buy, and Verizon stores with limited supplies of the new iPhones.
On Monday, Bloomberg sources said Apple could wind up with a 6 million iPhone Pro production shortfall by the year's end, adding that the situation remains fluid and lost production numbers could change.
"It's unfortunate for Apple to be short of its flagship Pro series going into the holiday season, especially if buyers end up pivoting to a competing product.
"The good thing for Apple is that it has plenty of ecosystem stickiness to contain most of the leakage and satiate this demand in the following quarters," IDC's Bryan Ma said.
Wedbush's Ives said Apple stores could see iPhone Pro shortages of up to 35%-45% of typical inventory heading into December.
Apple is caught in production hell in China, with waning consumer demand for upgrading iPhones. Couple this all together, which might indicate revenue from its iPhone sales may slide this quarter.