The coronavirus outbreak in China could impact Apple's iPhone supply chain, uprooting production deadlines, while local staffing might become an additional problem, according to a report from Nikkei Asian Review.
"The [coronavirus] situation in China could affect the planned production schedule," the publication quotes an anonymous supply chain executive as saying.
Other executives are cited as stressing that the SARS-like coronavirus has generated "massive uncertainties and challenges" for production of both iPhones and AirPods, since most of Apple's AirPods production is in China.
Fears about the impact on the otherwise blistering pace of production from the virus outbreak were aired last week at a news conference in Taipei by Terry Gou, founder of Foxconn, which trades as Hon Hai Precision Industry - the world's biggest maker of iPhones.
"We are considering whether or not to let employees return to China after the Lunar New Year holidays," said Gou on the eve of the introduced quarantine and lockdown for Wuhan - the epicenter of the outbreak - by Chinese authorities.
China's vacillating economic growth rate could also reel from the impact of the virus, say analysts, in turn potentially hurting local sales of consumer goods such as smartphones.
As Wuhan is currently on lockdown, the publication notes that Apple has its main manufacturing centers in neighboring Henan and Guangdong provinces.
Apple supplier Foxconn's Zhengzhou factory, which employs around 350,000 people and produces more than half of the world's iPhones, is located in Henan.
Chinese authorities, who have locked down Hubei Province, said early on Tuesday that the virus had so far claimed 106 lives on the mainland, with over 4,500 confirmed cases.
There has been no official comment on the reports from Apple.
Apple’s ‘Blistering Production Pace’
Earlier reports claimed Apple was gearing up to start manufacturing a new cut-price model of iPhone slated to be unveiled in March as part of its new cost-conscious pricing strategy to boost sales in emerging markets.
The reviewed approach was adopted after iPhone sales, accounting for half of Apple's revenue, suffered two quarters of decline in the first half of 2019.
The potential production disruption could sting the new iPhone, with Nikkei Asian Review citing two sources as saying although production was initially slated for the third week of February, the currently volatile situation spurred by the virus outbreak could change everything.
The recent developments come as industry sources are cited by the outlet as revealing that Apple has been boosting production, asking suppliers to make up to 80 million iPhones over the first half of this year.
This represents a 10 percent rise on last year's production schedule.
The Cupertino, California-based company has booked orders for up to 65 million of its older, predominantly iPhone 11 series phones, and up to 15 million units of the new 'affordable' model.
An industry source was quoted as saying:
"This year is much busier than last year."
