Coronavirus Could Impact Production of New iPhones [Report]

Apple is reportedly preparing for production of a new 'iPhone 9/iPhone SE 2' in February but there are concerns that the coronavirus outbreak could impact production, reports Bloomberg.

Virtually all of the world’s iPhones are made in China, primarily by Foxconn’s Hon Hai Precision Industry Co. at its so-called iPhone City in Zhengzhou and by Pegatron Corp. at an assembly site near Shanghai. Each of those locations is more than 500 kilometers away from Wuhan in central China, the epicenter of the viral outbreak, but that distance doesn’t immunize them from its effects.
“I can’t imagine a scenario where the supply chain isn’t disrupted,” said veteran industry analyst Patrick Moorhead of Moor Insights & Strategy. “If there’s one major hiccup in the raw materials, fabrication, assembly, test, and shipping, it will be a disruption.”

Sources say Apple is likely to begin production of a new low-cost iPhone next month which would be right in the middle of efforts to contain coronavirus. Production of the next generation iPhone set for release in September is less likely to be affected.


If severe travel restrictions expand to more cities in China, it could affect Apple's supply chain and slow down production. As confirmed cases rise in the Henan province - home to Foxconn's Zhengzhou facility - there are concerns factories could be closed to prevent further spread of the virus. Foxconn is monitoring the situation and says, "We can confirm that we have measures in place to ensure that we can continue to meet all global manufacturing obligations.”

Following the earthquake and tsunami that hit Japan in 2011, Apple has had a redundancy policy in place that requires major components be dual-sourced. Even so, a shortage of assembly line workers could have a big impact on shipments.

Hopefully, Apple will address concerns during its earnings call today. Please download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for updates.

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