iPhone 14 Pro/Max Shipments Down 15-20 Million Units Following Worker Protests [Report]

Production of the iPhone 14 has been significantly affected by worker protests and lockdowns at Foxconn's Zhengzhou plant, according to a new report from TF International Securities analyst Ming-Chi Kuo.

The average capacity utilization rate of Foxconn's Zhengzhou plant allegedly dropped to just 20% in November. It's currently expected to improve to 30-40% in December.

Kuo estimates that Apple will ship about 70-75 million iPhones in the fourth quarter, 20% fewer than previously expected. He also predicts that shipments of the iPhone 14 Pro/Max in 4Q22 will be 15-20 million units less than expected. This could drop Apple's revenue for the quarter by 20-30%.


In an effort to improve supply, Apple has reportedly shifted 10% of iPhone 14 Pro/Max orders to Pegatron and Luxtron; however, they aren't likely to begin mass shipments until late December at the earliest.

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Downside risks to Apple and the iPhone supply chain. Apple’s 4Q22 revenue and EPS have downside risks. Hon Hai/Foxconn is facing structural competition challenges, and iPhone component shipments may decline significantly in QoQ & YoY/HoH & YoY in 1Q23/1H23.
(1) Due to the high price of the iPhone 14 Pro series, Apple’s iPhone revenue in 4Q22 may be significantly lower than the market consensus by 20–30% or more.
(2) In addition to facing the challenge of lower-than-expected iPhone shipments/revenue in 4Q22, it will also be difficult for Hon Hai to continue to be the exclusive assembler of the iPhone 15 Pro series because Apple wants to diversify supply risks.
(3) iPhone 14 Pro series shipments in 4Q22 were significantly lower than expected, but component suppliers were generally not informed by Apple to cut orders, resulting in 4Q22 component inventory higher than normal for several weeks, which will lead to component shipments may have a more significant QoQ/HoH decline in 1Q23/1H23.
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Finally, Kuo does not believe that demand for the iPhone 14 Pro will be deferred. Rather, the analyst suggests that the demand will disappear amid an economic recession.

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