Apple shares slip on report iPhone production taking a big hit from unrest at China factory
Sofia Pitt, CNBC
Shares of Apple fell about 2% in early trading Monday after Bloomberg reported the company could see a production shortfall of nearly 6 million iPhone Pro models because of unrest at Foxconn’s China factory.
Bloomberg, citing a source, said Apple and Foxconn do expect to be able to make up that shortfall in 2023.
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Apple declined to comment on the report.
The unrest at Foxconn comes amid protests against China’s zero-Covid policy. Cases of Covid-19 have surged in mainland China, prompting residential lockdowns and business closures in many major cities. Protests against the lockdowns have broken out across the country, including at a Foxconn iPhone assembly facility in Zhengzhou.
Employees at Foxconn have protested food shortages, issues related to payments and how the company has handled Covid-19 outbreaks. Reuters said last week that workers smashed cameras and windows during some of the protests.
Foxconn said last week that it will continue to communicate with employees and the government to prevent similar violent incidences from happening. It said it’s also continuing to communicate with employees about payment concerns and that it will “try its best to actively solve the concerns and reasonable demands of employees.”
Analysts are also concerned about the recent manufacturing interruptions ahead of the holiday season.
Counterpoint Research released guidance Monday saying delivery times for iPhone 14 Pro and Pro Max are significantly delayed. Last week, customers could expect to wait 37 days for delivery, according to Counterpoint, the longest wait time since the models launched. Apple’s regular iPhone 14 is still in stock.
In a separate note out Monday, Wedbush analyst Dan Ives predicted major iPhone shortages due to China’s “head scratching zero-Covid policy.”
“We estimate that Apple now has significant iPhone shortages that could take off roughly at least 5% of units in the quarter and potentially up to 10% depending on the next few weeks in China around Foxconn production and protests,” Ives said in a note to investors.
JPMorgan was more optimistic in a note published Sunday, but still expressed concerns over the slowdown in China. “The ongoing challenges around delays in returning to a normal level of production at the Zhengzhou facility could limit the pace with which supply-demand equilibrium can be reached in the coming months, but supply appears to have rebounded from trough levels,” the firm wrote.
— CNBC’s Michael Bloom contributed to this report.
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Air taxi maker Joby Aviation in a new lawsuit accused competitor Archer Aviation of using stolen information by a former employee to “one-up” a partnership deal with a real estate developer.
“This is corporate espionage, planned and premeditated,” Joby said in the lawsuit filed Wednesday in a California Superior Court in Santa Cruz, where the company is based.
Archer and Joby did not immediately respond to CNBC’s request for comment.
The lawsuit alleges that former U.S. state and local policy lead, George Kivork, downloaded dozens of files and sent some content to his personal email two days before he resigned in July to take a job at Archer, which had recruited him.
By August, Joby said a partner that worked with Kivork said it had been approached by Archer with a “more lucrative deal.” Joby alleges that the eVTOL rival’s understanding of “highly confidential” details helped it leverage negotiations.
Joby also said the developer attempted to terminate the agreement, citing a breach of confidentiality.
Kivork refused to return the files when Joby approached him after conducting an investigation, according to the suit. The company also said Archer denied wrongdoing, and would not disclose how it learned about the terms of the agreement or provide results from an internal investigation it allegedly undertook.
The lawsuit comes during a busy period for electric vertical takeoff and landing (eVTOL) technology as companies race to gain Federal Aviation Administration certification to start flying commercially. ‘
The sector has also benefitted from President Donald Trump‘s newly minted eVTOL pilot program.
Joby argued in the complaint that it’s “imperative” to protect Joby’s work “from this type of espionage” to promote the sector’s success and ensure fair competition.
Last week, Joby said it completed its first test flight for a hybrid aircraft it’s working on with defense contractor L3Harris. This month, Amazon-backed Beta Technologies, another electric flight company, also went public on the New York Stock Exchange.
Joby shares have more than doubled over the last year, while Archer is up about 68%.
In August 2023, Archer settled a previous legal dispute with Boeing-owned Wisk Aero over the alleged theft of trade secrets. As part of the deal, Archer agreed to use Wisk as its autonomous tech partner.
A hearing is scheduled for March 20, 2026.
Joby and Archer year-to-date stock chart.
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