Apple faces up to $8 billion in revenue due to Covid-19 lockdowns in China


The ongoing Covid-19 lockdowns in China are expected to take a huge dent in Apple’s revenue for the April-June quarter as the company reported up to $8 billion in lost sales, particularly in due to Shanghai lockdown.

As Shanghai entered the second month of lockdown and more Chinese cities face pandemic restrictions, demand for Apple products in the country could slow further, Nikkei Asia reports.

Apple CEO Tim Cook said on an earnings call this week that “we estimated the strains to be between $4 billion and $8 billion and that strains are primarily centered around the Shanghai Corridor.” .

“COVID-related disruptions are also impacting customer demand in China,” added Apple CFO Luca Maestri.

The report said more than half of Apple’s top 200 suppliers have facilities in Shanghai and surrounding areas.

“The closures and traffic restrictions are disrupting a wide range of business activities in the region,” the report said on Friday.

The iPhone maker is also facing industry-wide silicon shortages, which will continue in the current quarter.

However, Cook said “nearly all affected final assembly plants have now restarted”.

“We are also encouraged that the number of Covid cases that have been reported in Shanghai has decreased over the past few days,” he added.

In Shanghai, 31 companies operate production facilities that supply Apple.

According to reports, some Apple suppliers have reopened facilities in bubble-like environments where workers stay indoors.

Apple’s biggest supplier, Foxconn, has kept production at its biggest iPhone assembly plant in the Chinese city of Zhengzhou.

In the Shanghai outbreak, nearly all of the victims were elderly, unvaccinated residents with underlying health conditions, Chinese officials said.



(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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