At the beginning of each year, as Apple suppliers prepare to produce new iPhones, Apple engineers and executives come to China for business trips. However, this year, the preparation process has been delayed due to travel restrictions caused by the new crown virus epidemic.
The production of new iPhones usually starts in the summer, but in the first few months of each year, Apple employees will come to China to improve the process with OEMs such as Foxconn.
Reuters cited former Apple employees as saying that if Apple engineers were unable to meet with Foxconn China engineers to plan iPhone 12 production, the situation "may be very bad."
"They probably have one assembly line they’re trying things out on," said one of the former employees who asked not to be named discussing production matters.
"Are Apple’s engineers with the Foxconn engineers? If they are, they’re probably making progress. But if they’re not, if they’re quarantined, that could be bad."
Sources familiar with Apple's processes say that work in this area usually begins after the Chinese New Year. By February, Apple has usually entered the later stages of new product engineering verification. Foxconn's workers started a small amount of assembly and reviewed the manufacturing process.
According to Reuters, the delay at this stage could affect the timing of Apple's finalization of purchase orders for chips and other components. These orders are usually confirmed long before full production starts.
Generally, Apple and Foxconn engineers will cooperate to build production lines and carry out trial operations in March and April and make final adjustments in April and May.
"It’s very complicated. There are so many variables in the environment, including small factors such as air pollution," one of the people familiar with the process said.
Supply chain experts have previously said that Apple still has time to ensure the production schedule of the new iPhone, but the current travel restrictions make the situation difficult.
An executive at a semiconductor company that supplies to smartphone makers and works with a Chinese team introduced the mobile phone production cycle. He said: "It is not possible to do face-to-face work at the moment. Some people say that this situation may continue for another month if it improves. However, we have actually lost two months, which is already a long period in the consumer electronics cycle time."
In February, Foxconn and other Apple suppliers' factories closed for a long time. Although some factories are now returning to work, labor shortages, travel restrictions and isolation rules have prevented them from reaching their maximum capacity. Foxconn executives are currently working remotely from Taipei and cannot return to mainland China.
Apple's frequent airlines, such as United, have also suspended many flights to China. United will not resume flights to Beijing, Chengdu, Hong Kong and Shanghai until April 24. Travelers who have traveled to China will also be subject to health checks and other restrictions when returning to the United States.
Apple had previously warned investors that the company could not meet its revenue target for the quarter ending March due to product shortages and store closures. Apple will announce more information on the impact of the new crown virus on its April earnings call.
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