UPDATED 00:02 EDT / FEBRUARY 11 2020

APPS

Apple and others may have avoided supply shortages as some Foxconn plants reopen in China

Apple Inc., along with various other tech companies, may have avoided serious supply shortages as some plants belonging to Chinese electronics manufacturer Foxconn partially opened Monday, despite conflicting reports that they might not.

Reuters reported Monday that the Foxconn factory in Shenzhen was given approval to reopen but with the plant only having “some production.”

The report added that 20,000 staff had returned to the plant on Monday, only 10% of Foxconn’s workforce in Shenzhen. The Foxconn plant in Zhengzhou, the main manufacturing plant for the iPhone, was also given approval to reopen, but like the Shenzhen plants, only a limited number of workers had returned to work.

The Zhengzhou plant is “the most critical iPhone production site,” making the iPhone 11 series and a new special edition, cheaper iPhone, Apple analyst Ming-Chi Kuo said in a note to clients reported by CNBC.

Apple is not alone in being affected by the ongoing Wuhan coronavirus epidemic. Other companies that use Foxconn for manufacturing include Amazon.com Inc., Cisco Systems Inc., Dell Inc., Google LLC, Hewlett Packard Enterprise Inc., Huawei Electronics Co. Ltd., Intel Corp., Nintendo Co. Ltd., Sony Corp. and Xiaomi Inc.

China’s integration into the global economy works both ways. While China itself is the global powerhouse for electronics manufacturing, the domestic Chinese consumer market is second only to the U.S. in terms of consumption, excluding the European Union as a whole.

The mainland China consumer market has crashed following the spread of the coronavirus. Market research firm Canalys forecast Feb. 3 that smartphone shipments in the Middle Kingdom have dropped between 40% and 50% in both the fourth quarter of 2019 and the first quarter of 2020. The infection numbers continue to increase with no end in site. The reality is that during a pandemic, people are not inclined to buy inessential consumer products.

Despite the drama in China, Apple stock, after dropping in early trading, closed regular Monday up almost a half-point, to $321.55.

Photo: Solomon203/Wikimedia Commons

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