Following a surge of COVID-19-triggered restrictions over the weekend, demonstrations have emerged across China, demanding an end to the nation’s contentious “zero-COVID” strategy. These protests not only criticize the severity of the lockdowns but, in the situation of a Foxconn plant, denounce hazardous working conditions.
Due to the recent lockdown measures, 200,000 employees at the factory were quarantined on-site due to fears of a COVID outbreak. A considerable number of workers escaped the facility under the cover of night, scaling fences for their health and safety, to participate in street protests. Even those who stayed behind resorted to destructive actions, vandalizing cameras and equipment in protest.
As a consequence of this unrest, the production of iPhones for Foxconn’s primary collaborator, Apple, has nearly come to a standstill. Experts project that the factory is now delayed in the manufacturing of approximately 6 million units, leading to a decline in Apple shares.
$AAPL “Each week of these closures and disturbances costs Apple an estimated $1 billion in lost iPhone sales. Around 5% of potential iPhone 14 sales may no longer be attainable due to the severe closures in China,” potentially resulting in up to $8B in missed sales.https://t.co/2oChiD1pN9
— kakashii (@kakashiii111) November 27, 2022
“We predict that Apple is facing significant shortages of iPhones, with a probable loss of at least 5% of units in the quarter, potentially rising up to 10% depending on the upcoming weeks in China concerning Foxconn production and demonstrations,” commented Wedbush analyst Dan Ives in a communication to investors.
Apple has refrained from providing a statement on the issue as of now. Foxconn has pledged to initiate dialogues between its workforce and the Chinese administration to quell the unrest.
Source of Image: ZorroGabriel / Shutterstock
