After warning of iPhone 14 Pro and Pro Max shortages from Covid-related manufacturing disruptions, Apple faces a new problem from worker protests at its main assembly plant in China. Still, Apple stock rose on Wednesday.
News reports say workers at a Foxconn factory in Zhengzhou staged angry protests this week over pay and working conditions. Workers clashed with police outside the factory, which has been under strict Covid-19 controls for weeks, the Wall Street Journal reported Wednesday.
The iPhone assembly workers were upset that expected bonuses had been delayed, the Journal said. They also complained about factory lockdowns because of Covid outbreaks.
Bloomberg reported that hundreds of workers clashed with security personnel amid disputes over quarantine controls and infections, unpaid wages, and access to food and medicine.
Taiwan-based Foxconn is Apple's main contract manufacturer. Its Zhengzhou plant is its biggest for making the latest iPhones, including the iPhone 14 Pro and Pro Max. Those premium handsets are in short supply.
Apple Stock Consolidating
On Nov. 6, Apple warned that Covid restrictions at the factory had "significantly reduced capacity" for the iPhone 14 Pro and Pro Max models. Those high-end models of the iPhone 14 series remain in high demand, the company said. But sales of regular iPhone 14 models have lagged.
Last week, a Wall Street analyst said the production snags could push $3 billion in iPhone sales from the December quarter to the March quarter.
On the stock market today, Apple stock rose 0.6% to 151.07. Apple stock has been in a consolidation pattern for the past 47 weeks with a buy point of 183.04, according to IBD MarketSmith charts.
Holiday Season Shortages Seen
Wedbush Securities analyst Daniel Ives predicted strong demand for Apple iPhones this holiday shopping season along with product stockouts.
"Demand for iPhone 14 units into the all-important Black Friday holiday weekend is way ahead of supply and could cause major shortages leading into Christmas season," Ives said in a note to clients Wednesday. "The 'zero Covid' China shutdowns in Foxconn have been a major gut punch to Apple this quarter and we believe have taken roughly 5% of iPhone 14 units out of the supply chain."
He added, "By early December, it will be increasingly difficult to get your hands on an iPhone 14 Pro with many delivery times likely pushed through to early January."
Ives rates Apple stock as outperform with a price target of 200.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
