Apple iPhone Q4 Shipments Improves Slightly As China Relaxes Covid Policy: TrendForce

TrendForce has corrected its Q422 projection on the total shipments of Apple Inc AAPL iPhone 14 models in 2022 to 78.1 million units, slightly up from the previous 78 million.
The revision reflected the Covid outbreak hampering the operation of Hon Hai Precision Industry Co Ltd HNHPF Foxconn's primary manufacturing base in the Chinese city of Zhengzhou.
As a result, the capacity utilization rate of the base has yet to rise above 70%.
Also Read: Here's How Apple's Crucial Partner Influenced China's Relaxation Of Covid Policies
The outbreak in Zhengzhou reached its height as Apple struggled to ramp up sales of the new iPhone models for this year to a peak.
Furthermore, the new Pro models have been in high demand, so Apple has kept raising its share in the overall iPhone production.
Hence, Foxconn, as the sole assembler of the new Pro models, has been under significant strain.
Besides the Zhengzhou base, Foxconn also pulled support from its other significant base in Shenzhen.
Apple decided to employ Luxshare as one of the upcoming iPhone 15 Pro Max assemblers.
However, Luxshare's only iPhone assembly plant is located in China.
In Vietnam, Luxshare has a plant for assembling Apple-related accessories, but the company currently has no plan for setting up a new iPhone production line there.
For 2023, Apple aims to double its device production capacity in India and have factories in Vietnam start making contributions by the middle of the year.
TrendForce believes that at least 30~35% of Apple's total device production capacity will have to be located in Vietnam and India to dodge the escalating trade dispute between China and the U.S.
Therefore, Apple will need to keep raising its share of device production in these two countries over the next several years.
TrendForce further highlighted that China's supply chain has started to experience a labor crisis this December, likely to get worse due to government policy.
TrendForce corrected its forecast of iPhone shipments in 1Q23 to 47 million units, down from the prior 52 million.
Price Action: AAPL shares traded lower by 0.30% at $129.66 on the last check Wednesday.