The worker unrest at Foxconn at the end of October further weighs on Apple’s production shortages and underscores how the draconian zero-tolerance measures undermine technology companies worldwide.

According to a recent CNN report, Daniel Ives, managing director of equity research at Wedbush Securities, believes that the persistent assembly disruptions in the world’s largest iPhone factory in  Zhengzhou is an “albatross” for Apple.

Ives said, “Every week of this shutdown and unrest we estimate is costing Apple roughly $1 billion a week in lost iPhone sales. Now roughly 5% of iPhone 14 sales are likely off the table due to these brutal shutdowns in China.”

He further explained that the production shutdown in Zhengzhou that started in October has significantly impacted Apple’s sales this quarter.

Over Black Friday, Apple iPhone 14 supplies couldn’t meet customer demand. This would likely lead to severe product shortages for the upcoming Christmas shopping season.

In a note on November 25, Ives wrote “Based on our analysis, we believe iPhone 14 Pro shortages have gotten much worse over the last week with very low inventories. We believe many Apple Stores now have iPhone 14 Pro shortages … of up to 25%-30% below normal heading into a typical December.”

In addition, earlier this month, Morgan Stanley analysts slashed forecasts by 6 million units for production capacity of iPhone Pro this quarter.

The Wall Street bank thinks that the worst possible outcome of the continuous lockdowns at Foxconn could be a potential 36% shortfall in iPhone revenues, or the equivalent of 20% of its total sales this quarter.

Under the pressure of strained supplies and workers’ revolt at the Zhengzhou plant, analysts said that the major Apple supplier would speed up the relocation of iPhone manufacturing in India.

Ming-Chi Kuo, an analyst at TF International Securities, wrote on Twitter that Foxconn’s iPhone production in India next year will surge by at least 150% compared to this year. 

And in the long run, Kuo projected Foxconn in India could supply the world with 40% to 45% of iPhones, far exceeding its current shipment of below 4%.

Regarding the workers’ protests in the Foxconn facility, CNN reported that company management had to initiate a massive recruitment campaign after workers fled the site amid fears of a stringent “zero-COVID” policy following an outbreak in October.

Foxconn pledged to offer new hires a $416 (3,000 yuan) bonus after working for 30 days and an additional $416 after 60 days in the position.

But when the workers started the job, they learned that they would have to work until March 15 and May next year to receive both bonuses.

The worker told CNN, “The new recruits had to work more days to get the bonus they were promised, so they felt cheated.”

CNN noted that the workers were very upset with the salary, unclean living environment, and the stringent “zero-COVID” policy.

Videos circulated on social media showing groups of security officers wearing white hazmat suits quelling the riots by brutally beating unarmed protesters with batons and metal rods, even those lying on the ground.

Workers retaliated by taking down barriers, throwing objects and overturning police cars.

CNN noted the protest ended on November 24 after the workers received their first payments.

Witnessing this, a worker who has been with Foxconn for six years told the outlet that he felt so disappointed with how the company treated their staff and planned to give up his job. 

He said, “Foxconn is a Taiwanese company. Not only did it not spread Taiwan’s values of democracy and freedom to the mainland, it was assimilated by the Chinese Communist Party and became so cruel and inhumane. I feel very sad about it.”

He claimed that he wanted to join the protest just because he wanted to support the new recruits.

He added, “If today I remain silent about the suffering of others, who will speak out for me tomorrow?”

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