The production deficit in China could trigger an increase in the price of Apple Inc. #AAPL

The main production line of large Chinese factory Foxconn, which produces different gadgets by Apple are in the cities of Shenzhen and Zhengzhou. The spread of dangerous diseases led to the suspension of the Assembly lines of the most diverse art, and as Apple and other manufacturers. Because of the coronavirus, even Apple and its major Chinese competitor Xiaomi has been forced to temporarily close its retail stores.

 

Authorities in the region must once again verify whether all measures have been taken to combat coronavirus and if everything is normal, then production will gradually resume in the next couple of days about 10 per cent of the staff will be able to go to work. At Foxconn claim that the health of employees for a company that has the highest priority. But there is a fear of the loss of production departments. If at least one link in the chain of supply of spare parts is not, this may lead to that coveted gadget will come in time and will not get to the shops.

 

Head of Hi-Tech Mail.ru Dmitriy Ryabin said, “China is not only the largest manufacturer of Apple devices, but also the second in the world by their customers in terms of sales. Already, the demand for equipment of this brand in the Chinese market fell more than 50 percent. If restrictions because of the virus will be delayed, it may be a significant impact on quarterly revenue of the company. The hardest hit category iPhone and AirPods. Moreover, Apple may push iPhone 9 - he SE2 - at a later date. In the end, most brands anyway weighed the risks and think about the reallocation of production to other countries. Basically considered, the region of South-East Asia as the least costly scenario transfer”.

 

The first blow to the economy of China was caused by the increase in the cost of labor, then joined the new US sanctions, after which the film is supplemented by a coronavirus. It is therefore not surprising that after all these events, Apple plans to move some production of the iPhone in India.

 

At this stage, the factories of Foxconn and other production China resume work partially, and with additional checks. So signs of slowing down performance on the face. These figures call into question a quick issue 45-million-strong party AirPods Pro, which Apple is counting on this year. As a result, this may lead to deficiency of assortment, which will lead to higher prices at Apple Inc.

 

Rowan said, “panic is often far more immediate and dangerous threat to the economy than the facts. Therefore underestimate the consequences are not worth it, they will be extremely serious for China, and for all market participants”.

 

Oddly enough, the payoff can be Samsung, which has a more distributed network of production and not so dependent on China in terms of sales. Apple, according to Dmitry Ryabinin, will suffer no less, and maybe even more Chinese brands due to the lack of large stocks.

17 February, 2020
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