Apple and the Shanghai effect | WARC | The Feed

Apple and the Shanghai effect

Apple, the technology company, has acknowledged that “COVID-related disruptions are having some impact on customer demand in China”, but the problems may go deeper, according to Nikkei Asia.

Context 

The title reports that more than half of Apple’s 200 main suppliers have facilities in Shanghai and the surrounding regions – where COVID lockdowns and traffic restrictions have severely disrupted business activity. 

Add ongoing silicon shortages to that situation (something the industry as a whole is having to deal with) and the combined constraints add up to a potential $8 billion hit to revenue in the second quarter, admitted Apple CEO Tim Cook during an earnings call.

But he also reported that “almost all of the affected final assembly factories have now restarted”.

Asia figures 

• Sales growth in greater China slowed from double digits to 3.5%, which Apple attributed partly to different iPhone launch times in the past two years.
• Revenue in Japan dipped 0.2%; across the Asia-Pacific region it was down 6.7%.

Sourced from Nikkei Asia [Image: Bangyu Wang on Unsplash]