According to reports, Foxconn, which is a major assembler of Apple (AAPL) iPhones, said on Tuesday that the impact of China’s Covid-19 lockdowns on its operations was not as bad as expected.
China had brought in severe lockdowns in some of its big cities after it saw a rapid increase in coronavirus cases. Not long after, Foxconn had announced that it would stop its operations in Shenzhen, a Chinese manufacturing hub where the company makes iPhones, iPads and Macs.
Earlier, the iPhone maker had scared off investors when it said that its third quarter sales could be affected by as much as $8 billion following various challenges like supply chain constraints.
While on a conference call with analysts after the company reported its second-quarter results, Apple CEO Tim Cook said that “Covid is difficult to predict.”
According to reports, Foxconn Chairman Liu Young-way said that the company has seen lesser impact from the lockdowns than it had anticipated, and therefore has lifted its outlook for the current quarter and the full year. Foxconn said that important manufacturing facilities were operating at normal levels and product development is taking place at the required pace.
These developments don’t necessarily mean Apple’s production is completely free from supply chain constraints caused by Covid-19 lockdowns, or chip shortages. It only hints that the roadblocks to iPhone manufacturing are slowly getting removed. Apple’s iPhone business generated $50.57 billion in revenue during its second quarter, a major share of its $97.28 billion in total revenues.
The Foxconn chairman said, “The overall lockdown impact on Foxconn is rather limited. You can tell from our revenues in April and May’s performance is also better than we estimated.”
Source: Read Full Article