Kuo: Apple's revenue from iPhone sales may decline by 20-30% this quarter due to protests at Foxconn factory

By: Elena Shcherban | 30.11.2022, 01:04

Due to employee protests at the Foxconn plant, which is the largest manufacturer of iPhones, Apple will face big problems related to both production and revenue. These are the disappointing predictions of famous analyst Ming-Chi Kuo.

Here's What We Know

According to Kuo, in the fourth quarter of 2022 shipments of iPhones may drop by 20% - from the previously projected 80-85 million to 70-75 million units.

This will also affect the revenue from smartphone sales: according to the analyst's forecast, it will decline by 20-30% or even more at the end of the quarter. He believes that due to long delays in delivery, demand for the iPhone 14 Pro and iPhone 14 Pro Max will drop significantly or disappear altogether: for example, many customers who would buy an iPhone 14 Pro right now will not return for it next year when the gadget is back in stock.

According to Kuo, the average capacity utilization rate at the Foxconn plant was only about 20 percent in November, and it's only expected to improve to 30 to 40 percent in December. Pegatron and Luxshare have transferred some orders for production of the iPhone 14 Pro and 14 Pro Max, but we're only talking about 10%. Mass shipments are not expected until late December at the earliest.

Problems at the factory began back in October, when a coronavirus outbreak put 20,000 workers under quarantine in conditions with limited food. This led many workers to flee, after which Foxconn began hiring new people. But they, too, rebelled because they were dissatisfied with working conditions and pay. Now the situation remains unstable, with Foxconn already offering bonuses of up to $1,800 a month for employees to stay at the factory during December and January.

Source: Macrumors

Go Deeper:

Business