WRAPUP 4-Apple warns of lower iPhone shipments as COVID curbs hobble China plant - Yahoo Finance

(Adds Foxconn's hiring plan, expert comment; updates infections tally)

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Apple expects little shipments of iPhone 14 Pro and Pro Max

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Apple says a China works operating astatine sharply reduced capacity

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Apple supplier Foxconn revises down Q4 outlook

By Ben Blanchard and Jaiveer Shekhawat

TAIPEI, Nov 7 (Reuters) - Apple Inc expects little shipments of premium iPhone 14 models than antecedently anticipated pursuing a important accumulation chopped astatine a virus-blighted works successful China, dampening its income outlook for the engaged year-end vacation season.

Demand for high-end smartphones assembled astatine Foxconn's Zhengzhou works has helped Apple stay a agleam spot successful a exertion assemblage battered by user spending cutbacks amid surging ostentation and involvement rates.

But the Cupertino, California-based vendor has fallen unfortunate to China's zero-COVID-19 policy, which has seen planetary firms including Canada Goose Holdings Inc and Estee Lauder Companies Inc unopen section stores and chopped forecasts.

"The installation is presently operating astatine importantly reduced capacity," Apple said connected Sunday without detailing the standard of the reduction.

"We proceed to spot beardown request for iPhone 14 Pro and iPhone 14 Pro Max models. However, we present expect little iPhone 14 Pro and iPhone 14 Pro Max shipments than we antecedently anticipated," it said successful a statement.

Reuters past period reported that iPhone output could slump arsenic overmuch arsenic 30% successful November astatine Foxconn's Zhengzhou mill - 1 of the world's biggest - owed to COVID-19 restrictions.

The mill successful cardinal China, which employs astir 200,000 people, has been rocked by discontent implicit stringent measures to curb the dispersed of COVID-19, with galore workers fleeing the site.

Market researcher TrendForce past week chopped its iPhone shipment forecast for October-December by 2 cardinal to 3 cardinal units, from 80 million, owed to the factory's troubles, adding its probe recovered capableness utilisation rates astir 70%.

Apple, which began selling its iPhone 14 scope successful September, said customers should expect longer waiting times.

"Anything that affects Apple's accumulation evidently affects their stock price," said Quincy Krosby, main planetary strategist astatine LPL Financial successful Charlotte, North Carolina.

"But this is portion of a overmuch deeper communicative - the uncertainty surrounding the aboriginal of the Chinese economy... These headlines are portion of the ongoing saga arsenic to whether determination is immoderate information to the accordant rumours that authorities are discussing whether immoderate of the measures volition beryllium lifted successful the archetypal quarter."

China connected Monday reported its highest fig of caller COVID-19 infections successful six months, with disruption to the world's second-largest system spreading nationwide since October. At the weekend, wellness officials said they would instrumentality with strict coronavirus curbs, disappointing investors hoping for easing.

Meanwhile, Apple expects to nutrient astatine slightest 3 cardinal less iPhone 14 handsets this twelvemonth than planned owed to anemic request for lower-end models, Bloomberg News reported connected Monday, citing radical acquainted with the plan.

The world's astir invaluable firm, with a marketplace capitalisation of $2.2 trillion, past period forecast October-December gross maturation would dilatory from the erstwhile quarter's 8% - though marketplace watchers regarded that favourably successful a battered sector.

"Given that Apple reported lone 2 weeks agone with affirmative guidance, we deliberation this points to the imaginable for a longer and much terrible lockdown," Credit Suisse analysts said, expecting iPhone income to beryllium pushed to aboriginal quarters than lost.

They estimated Apple's gross to emergence 3% successful the existent quarter, with iPhone income increasing 2% to $73 billion.

FOXCONN CUTS OUTLOOK

Taiwan's Foxconn is the world's largest declaration electronics shaper and Apple's biggest iPhone maker, accounting for 70% of shipments globally. It has iPhone accumulation sites successful India and confederate China, but its biggest is successful the metropolis of Zhengzhou successful the eastbound Chinese state of Henan.

Local officials precocious commented connected cases of COVID-19 astatine the plant. Foxconn has declined to disclose the fig of infections oregon remark connected the conditions of those infected.

On Monday, it said it was moving to resume afloat accumulation astatine Zhengzhou arsenic soon arsenic possible. A idiosyncratic acquainted with the substance told Reuters that Foxconn's people is by the 2nd fractional of November.

At the petition of the section government, Foxconn said it would instrumentality measures to curb the dispersed of COVID-19, including restricting worker question to betwixt their dormitory and mill area.

The shaper has besides began a recruitment drive, offering workers who near the works during Oct. 10 to Nov. 5 a one-off bonus of 500 yuan ($69) if they returned. It besides advertised salaries of 30 yuan an hour, higher than the 17 to 23 yuan basal salaries that immoderate workers told Reuters they received.

The Zhengzhou Airport Economy Zone, which houses the iPhone factory, entered a seven-day lockdown connected Wednesday with measures included barring residents from going retired and lone allowing entree to approved vehicles.

Foxconn said the provincial authorities "has made it wide that it will, arsenic always, afloat enactment Foxconn".

"Foxconn is present moving with the authorities successful concerted effort to stamp retired the pandemic and resume accumulation to its afloat capableness arsenic rapidly arsenic possible."

Having antecedently expressed "cautious optimism" successful its fourth-quarter net guidance, Foxconn connected Monday said it volition "revise down" its outlook fixed events successful Zhengzhou.

The 4th fourth is traditionally a blistery play for Taiwanese exertion companies arsenic they contention to proviso smartphones, tablet computers and different electronics for the year-end vacation buying play successful Western markets.

Foxconn releases its third-quarter net results connected Nov. 10.

The firm, formally Hon Hai Precision Industry Co Ltd, saw its stock terms autumn 0.5% successful Monday trade, versus a 1.5% emergence successful the benchmark index.

($1 = 7.2135 Chinese yuan renminbi)

(Reporting by Ben Blanchard and Sarah Wu successful Taipei, Caroline Valetkevitch successful New York and Jaiveer Shekhawat successful Bengaluru; Additional reporting by Brenda Goh; Writing by Miyoung Kim; Editing by Daniel Wallis and Christopher Cushing)