Samsung, Apple and other manufacturers have stopped production at their factories in China due to the coronavirus epidemic. The authorities ordered the closure for one to two weeks, but the quarantine may be extended, which carries the risk of disruption for the supply of new iPhones and other Apple and Samsung devices.
The Chinese government ordered the temporary closure of a number of factories located in relative proximity to the city of Wuhan. The list includes the factories of Samsung and Chinese Foxconn, which is directly associated with Apple. The order, implies a complete shutdown of the plants.
The coronavirus epidemic called 2019-nCoV in China, stopped the production in Suzhou, which is considered one of the largest production centers in China. The distance between Suzhou and the city of Wuhan, from which the epidemic began, is about 560 km.
Foxconn is Apple’s primary partner in assembling its devices, in particular iPhone smartphones. The decision of the PRC authorities affected all the factories preparing FMCG (Fast Moving Consumer Goods) products.
The production halt might delay iPhone SE 2
The spread of the 2019-nCoV virus, according to Apple Insider, could significantly affect Apple’s global business. As a rule, the company begins the production of new Mac computers and iPad tablets 60 days before their launch, and in the case of iPhones, the pipeline starts 90-120 days before the products hit market. The closure of the Foxconn plant, in particular, may affect Apple’s upcoming event, which according to analysts Ming Chi Kuo, is planned to happen in March 2020.
As part of this event, Apple may show a new smartphone iPhone SE 2, also known as iPhone 9, and a number of other devices. At the end of January 2020, it was expected that the production may begin anytime. Depending on how long the closure of the factories in China lasts, the supply of smartphones of the iPhone 12 line may also be in jeopardy. The launch may take place in September 2020, so the production of new smartphones should begin in June-July 2020.
Coronavirus can have a significant impact on Apple sales in China, which is already going slow. At the end of 2019, iPhone sales fell by 35% due to the high cost of the latest models and the small number of innovations compared to the previous generation.
Which factories are closed in China due to coronavirus epidemic?
In addition to Samsung and Apple, which have not yet commented on what is happening, the pharmaceutical giant Johnson & Johnson has also a factory closed down. Other companies that has production facilities near the city of Wuhan include BorgWarner, Bosch, Valeo, etc.
What is currently happening in China may affect the Chinese and global economies in the foreseeable future. The consumer behaviour is changed in China, because people don’t go out becasue of the epidemic and now the shutdown of certain plants might effect the country’s economy as well as lead to global consequences, since China is an engine of growth for many economies in the world.