Apple suppliers Foxconn and Wistron announced they would shutter their India-based factories in response to a new government lockdown order. Indian Prime Minister Narendra Modi issued a 21-day nationwide self-quarantine mandate to halt the spread of COVID-19 on Tuesday. Consequently, the iPhone maker might have to alter its plans to reopen its non-Greater China located stores in early April.
Details on Apple Suppliers’ Indian Production Capacity
Although both corporations are based in Taiwan, Foxconn and Wistron maintain production capacity in India. Since last April, Foxconn has assembled iPhones in its Chennai-based factory. Similarly, Wistron builds printed circuit boards for previous generation Apple handsets in Bengaluru.
The Big Tech firm’s supply chain is concentrated mainly in mainland China, but the corporation decided to diversify its production capacity in response to the Sino-American trade war. As a result, Foxconn and Wistron have increased its factory footprint in the Southeast Asian republic. In fact, Wistron intended to launch a new iPhone factory in the region next month.
However, the Modi administration’s 21-day lockdown order has presented the iPhone maker with a new supply chain problem.
How Apple Might be Affected by the Indian
As of this writing, Apple hasn’t issued an official statement regarding how the Indian lockdown will impact its operations. The firm reportedly had plans gradually to reopen the stores it operates outside of greater China in April. But Apple might now have to reschedule its retail reopening initiative.
In early March, the corporation told its retail employees it had a shortage of replacement iPhones. Since Foxconn and Wistron dedicated some of their Indian production capacity to making older handsets, the company’s inventory of substitution smartphones probably won’t be replenished anytime soon.
The Cupertino, California-based firm has also recently struggled to keep its new products in stock because of various national quarantine orders. Apple vendors Ibiden Co. Ltd., Murata Manufacturing, and Renesas Electronics Corporation had to shutter their Malaysian plants due to government lockdown mandates. Apple also maintains production capacity in Italy, Israel, Germany, and the United Kingdom that will likely be affected by those country’s quarantine orders.
The Silicon Valley giant’s production woes might also extend to the launch of products slated for release later this year.
Financial services company Wedbush Securities recently offered guidance that the firm might delay the release of the 5G iPhones series because of the coronavirus pandemic. With the newly announced temporary manufacturing stoppage in India, a rescheduling seems even more likely.
Apple might also delay the release of its iPhone SE successor device because of the COVID-19’s ongoing impact on production. The firm planned to begin manufacturing a new budget iPhone in February ahead of a March deployment, but that rollout didn’t occur.
With a market capitalization of over $1 trillion, Apple will ultimately power through the problems created by the COVID-19 outbreak. But its 2020 financial outlook, and that of its suppliers, will take a significant hit.