Apple faces up to $8 bn revenue hit due to China lockdowns

The report said that more than half of Apple's 200 main suppliers have facilities in Shanghai and the surrounding regions.

San Francisco: The ongoing Covid-19 lockdowns in China are set to make a huge dent in Apple revenue for the April-June quarter as the company has indicated up to $8 billion loss in sales especially owing to the Shanghai lockdown.

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

Apple CEO Tim Cook said in an earnings call this week that “we have estimated the constraints to be in the range of $4 to $8 billion and these constraints are primarily centred around the Shanghai corridor”.

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“The COVID-related disruptions are also having some impact on customer demand in China,” added Apple CFO Luca Maestri.

The report said that more than half of Apple’s 200 main suppliers have facilities in Shanghai and the surrounding regions.

“The lockdowns and traffic restrictions disrupt a broad swath of business activities in the region,” the report said on Friday.

The iPhone maker is also facing industrywide silicon shortages, which will continue into the current quarter.

However, Cook said that “almost all of the affected final assembly factories have now restarted”.

“We’re also encouraged that the Covid case-count that’s been reported in Shanghai has decreased over the last few days,” he added.

In Shanghai, 31 companies run production facilities that supply to Apple.

According to reports, some Apple suppliers have reopened facilities in bubble-like environments where workers are staying inside the premises.

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

In Shanghai’s outbreak, nearly all victims have been elderly, unvaccinated residents with underlying health problems, according to Chinese officials.

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