Apple will be able to manufacture more iPhones now that its factories in China have reopened, but the company is now concerned about whether there will be sufficient demand for these items, according to a report by Reuters.
This comes just weeks after concerns that Apple stores would have a shortage of replacement parts due to the effects of the global pandemic of coronavirus, officially called COVID-19, on the supply chain. After factories in China were closed for months due to the outbreak, manufacturing in the region is starting to get back on track. But there are concerns that consumers will be less inclined to buy new technology products while social distancing and isolation measures are in place.
“No one is talking about manpower or material shortage (in China) anymore. Now everyone is looking at whether demand from U.S. and Europe could keep up,” an unnamed senior official at an Apple contract assembler told Reuters. “The focus now is the demand from consumers in the U.S. and Europe.”
Estimates from contract assemblers are that the number of orders of Apple products may drop by 18% in this quarter compared to this time last year. Another supplier that ships iPhone displays said it was thinking about lowering its shipping targets by 17%.
Other officials at Apple suppliers also raise the concern that more supply chain problems could arise as other countries in Asia go through various lockdown and quarantine procedures of their own. “Things are changing on a day by day basis due to supply chain disruptions, so it is difficult to craft any meaningful comment at the moment about both supply and demand,” an official from a Malaysian supplier said to Reuters.
Apple and other technology companies have been hit hard by the coronavirus. The company closed its retail stores, first in China and then around the rest of the world, and it announced it was unlikely to meet its second-quarter revenue target. At the start of this month, CEO Tim Cook assured people that the company was reopening both its stores in China and its factories there, and said that this was a “temporary condition” and that Apple was a “fundamentally strong” company.