Early each year, Apple suppliers are preparing to produce new iPhones. And Apple engineers and executives come to China for business trips. However, this year, the preparation process of the iPhone 12 has been delayed due to travel restrictions caused by the new coronavirus epidemic.
The production of new iPhones usually starts in the summer. But in the first few months of each year, Apple employees will come to China to improve the process with OEMs such as Foxconn. Former Apple employees interviewed by Reuters said that if Apple engineers were unable to meet with Foxconn China engineers to plan iPhone 12 production, the situation ‘may be very bad’.
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Regarding production issues, the former employee said: ‘They probably have one assembly line they’re trying things out on. Are Apple’s engineers with the Foxconn engineers? If they are, they’re probably making progress. But if they’re not, that could be bad.’
Sources familiar with Apple’s processes say that work in this area usually begins after the Chinese New Year. By February, Apple has usually entered the later stages of new product engineering verification. Foxconn’s workers started a small amount of assembly and reviewed the manufacturing process.
The delay at this stage could affect the timing of Apple’s finalization of purchase orders for chips and other components. These orders are usually confirmed long before full production starts.
Generally, Apple and Foxconn engineers will cooperate to build production lines and carry out trial operations in March and April, and make final adjustments in April and May. Sources familiar with Apple’s processes said the entire process was ‘very complicated’ and ‘there are many variables in the environment’.
Some supply chain experts have previously said that Apple still has time to ensure the production schedule of the new iPhone. However, current travel restrictions make the situation difficult.
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An executive at a semiconductor company that works with a Chinese team introduced the smartphone production cycle. He said: ‘There is no face-to-face work being done. And the word is, that’s probably not going to change for another month at best. You’re really talking about two lost months, which in the consumer electronics cycle is huge.’
In February, Foxconn and other Apple suppliers’ factories closed for a long time. Although some factories are now returning to work, labor shortages, travel restrictions, and isolation rules have prevented them from reaching their maximum capacity. Foxconn executives are currently working remotely from Taipei and cannot return to mainland China.
Apple’s frequent airlines, such as United, have also suspended many flights to China. United will not resume flights to Beijing, Chengdu, Hong Kong, and Shanghai until April 24. Travelers who have traveled to China will also be subject to health checks and other restrictions when returning to the United States.
Apple had previously warned investors that the company could not meet its revenue target due to product shortages and store closures. Apple will announce more information on the impact of the new crown virus on its April earnings call.