iPhone sales in China are experiencing a more significant decline than expected, according to industry analysts, Ming-Chi Kuo, a specialist in Apple’s affairs, attributed this decline to reduced shipments from the Foxconn factory in Zhengzhou, which is used for iPhone production.
The factory faced labor protests in 2022 over wage and working condition issues, along with the company’s decision to delay bonuses and recurring challenges related to COVID-19 lockdowns.
The measures to combat COVID-19 had affected Foxconn’s profits, the company responsible for producing iPhones for Apple.
Although the Chinese authorities reopened the factory following the protests, the disruptions have still had a significant impact on Apple’s supply chain.
The iPhone shipment decline in China is higher than expected.
Due to labor protests last November, the Zhengzhou iPhone factory shipped about 12 million fewer iPhone 14 Pro & Pro Max units, resulting in a lower revenue baseline for 4Q22.
Nonetheless, Apple predicted its 4Q23…
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) November 3, 2023
Analysts noted that this disruption represented a “significant blow to Apple’s supply chain.” It led Foxconn to reduce shipments of iPhone 14 Pro and iPhone 14 Pro Max by 12 million units, resulting in a decline in Apple’s revenue during the previous fiscal quarter, equivalent to Q3 of the calendar year.
Apple initially projected that its revenue in Q4 of 2023 would be similar to the same quarter in the previous year.
However, the company reported slightly lower revenue of approximately $89.5 billion, compared to about $90.1 billion in Q4 of 2022.
The declining demand for iPhones in the Chinese market, largely due to Huawei’s resurgence, is expected to continue in 2024 as the Chinese market undergoes structural changes and competes with local companies.
