Investment bank Piper Sandler expects Apple and Foxconn to catch up on production of the iPhone 14 Pro in December, but will still be short about 9 million iPhones. despite the easing of COVID-19 precautions in Zhengzhou, Foxconn’s main plant there is significantly behind on production of the iPhone 14 series. In a note to investors, Piper Sandler said that overall, it continues to “believe Apple remains a strong brand.
While it reduced Apple’s revenue estimate by $8 billion for the December quarter, it still rates the company as Overweight, “although our lower valuation on Apple while temporarily reduced due to unforeseen events is primarily due to supply chain concerns surrounding a series of events at the Zhengzhou plant,” the note said.” There has been some disruption at this plant, which has been well known.”
“We know that Foxconn’s Zhengzhou plant is a major hub for iPhone production, with more than 50 percent of assembled iPhones coming from the plant,” Piper Sandler continued.” We believe most of the disruptions occurred in November, and at its worst, the plant’s utilization rate may have dropped to 50 percent or below.”
Foxconn has shifted some iPhone production to India, but the investment bank’s analysts don’t think it matters.” It said, “[In] our view, India still accounts for less than 5 percent of total iPhone 14 production and may only help to a limited extent at this point.
The firm does expect that Apple “will try to catch up with December production,” but also “will prioritize production of the iPhone 14 Pro over other models.
In addition, Piper Sandler conducts a biannual survey of teens that includes questions about plans to buy an iPhone, and the latest version, dated October 2022, shows that 88 percent of teens intend to buy one.
