Shares of Apple fell 2% in early Monday trading as the Palo Alto company is struggling with unrest at the world’s biggest iPhone factory in China.
Last week thousands of employees quit the Foxconn iPhone assembly facility in Zhengzhou, amid protests over strict Covid restrictions and issues related to payments.
On Monday Bloomberg reported the company could see a production shortfall of nearly 6 million iPhone Pro models. On Friday Reuters also reported that Foxconn saw a further drop in November shipments.
The news came as cases of Covid have surged in mainland China, prompting lockdowns and closures in many major cities. Protests against the lockdowns have broken out across the country.
Demand for iPhone 14 during the Black Friday holiday weekend was higher than supply and could cause major shortages leading into Christmas, Wedbush analyst Dan Ives wrote in a note.
“Based on our analysis, we believe iPhone 14 Pro shortages have gotten much worse over the last week with very low inventories,” he said.
Ives said China’s “head scratching zero-Covid policy” could take off roughly at least 5% of units in the quarter, and potentially up to 10% depending on the next weeks, as infections are growing and Foxconn’s iPhone plant problem are not over.
The Zhengzhou campus has been grappling with a Covid outbreak since October forcing scores of workers to leave the company.
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