There has been a lot of talk about how everyone is analyzing the China Wuhan virus outbreak and seeing the situation as well as revising their targets. However, we have to understand that this is an impact on companies as well. Although these companies are not working out of China, they supply parts from China which could face disruption. One company that relies heavily on China, however, is Apple since we know that the entire iPhone is made by Foxconn which is a Taiwanese company.
Taiwan’s Foxconn has been making iPhones in its Chinese factory from years. But the Chinese government recently ordered all the factories inside the country to shut down which means Foxconn factories have been closed. While it is fine for the factory to be shut down for a week or so, the impact in production could be faced if the factory shut down prolongs.
It is also reported by Reuters now that the iPhone production could mean that Apple customers would face disruption in buying a new iPhone. While we know that this is not a serious issue since people can live without their phones, this will be a huge loss for Apple.
Although the Chinese government has ordered Foxconn to shut down factories completely till February 10, this could be extended if the situation is not under control. And if that’s the case, Foxconn says that it will not be able to meet shipment estimates for its clients including Apple.
At the moment, Foxconn was using its factories in India, Mexico and Vietnam to fill the gap of China’s short supply but if the factory remains shut for longer, the gap will widen and there will be a shortage after that. As per a source, Foxconn is “worried about delays for another week or even another month. The impact would be big,” and adds that “It definitely will have an impact on the Apple production line.”