Due to problems with the supply of iPhones and a general decline in the stock market, Apple's shares dropped to an 18-month low this week.
On Wednesday, the company's stock reached its lowest level since June 2021 and closed at $126.04, remaining in that range, Mac Rumors reports.
The Tech Giant Is Struggling With The Effects Of Zhengzhou's COVID-19 Restrictions
Over the past few months, troubles with COVID-19 have limited iPhone output at Apple's manufacturing partner Foxconn.
Workers at Foxconn's primary iPhone facility in Zhengzhou, China, protested last month due to terrible working conditions brought on by COVID-19 regulations.
However, the iPhone manufacturer is experiencing labor scarcity as a result of the virus's rapid spread, even though the Chinese government has already begun to loosen some restrictions.
With that, the company published an unusual public alert last month, saying that due production limits at Foxconn at the time, shipments of the iPhone 14 Pro and iPhone 14 Pro Max will be lower than expected.
Additionally, it was noted earlier this week that Foxconn's overall capacity utilization remained below 70%, according to Gizchina.
Due to the enormous demand for Apple's current flagship models, this issue has since begun to affect the company's ability to produce the iPhone 14 Pro and the iPhone 14 Pro Max.
However, the supply of these iPhones has been delayed by many weeks as a direct result of the production problem.
In addition to its headquarters in Zhengzhou, Foxconn also relies on its other significant base in the Chinese city of Shenzhen.
Although this action was taken, it was still insufficient to immediately alleviate the capacity shortage that Apple is experiencing.
In light of the current circumstances, Trend Force has revised its estimate of the total number of shipments of all iPhone 14 models in 2022 to 78.1 million units.
The normal iPhone 14 and iPhone 14 Plus models, however, are both still available on the tech giant's store website.
Read More: Apple Faces iPhone Production Disruption In 2023 As COVID-19 Resurfaces In China
The Holidays Are Projected To Make Things Worse For The iPhone Maker
The COVID-19-related problems, the economic concerns, and the Chinese New Year holidays will make matters worse for Apple, at least through the first half of 2023.
With this, Apple plans to considerably increase the number of offshore production sites that are outside of China due to the growing concern about geopolitical tensions.
By the middle of the year, plants in Vietnam should begin to contribute to Apple's 2023 goal of doubling its device production capacity in India.
The company will be forced to rely solely on production facilities outside of China to meet the demand for its products in the North American market because of the growing trade spat between China and the US.
This will only be possible, according to Trend Force, if at least 30-35% of Apple's whole device production capacity is situated in Vietnam and India.
Therefore, over the coming years, Apple will need to increase the proportion of devices produced in these two nations.
Related Article: Apple Contractor Foxconn Invests $500 Million in India to Diversify Supply Chain
