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At Present, Rumors of an iPhone Production Slowdown at a Foxconn plant due to the Coronavirus could be over Exaggerated

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In early October Patently Apple posted a report titled "Apple has Reportedly Increased Orders for it's Entry Level iPhone 11 due to Better-than-Expected Sales." The news was based on a rumor from the Nikkei Asian Review (the Nikkei). About four months later and the Nikkei is back reversing that call because of the coronavirus outbreak in China.


The Nikkei reports that while Apple had increased iPhone orders for the first half of 2020, mass production "might be delayed due to the virus outbreak."


The coronavirus outbreak has so far killed more than 100 people and infected over 4,500 in China, stranded tens of millions during the Lunar New Year holiday and rattled global markets. The report was also covered by Reuters this morning.


The understandable concern over the coronavirus reportedly spread quickly to Apple supplier Foxconn. Prior to today's Nikkei report, "The Straights Times" reported a week ago that Foxconn had asked employees from its Wuhan plant in China who are in Taiwan for the Chinese New Year holidays to stay back, given the new coronavirus outbreak in the city.


The authorities have confirmed more than 400 cases of the virus in China, mostly in the central city of Wuhan where it originated at the end of 2019.


Foxconn, formally known as Hon Hai Precision Industry Co, said in a statement about its annual new year party in Taipei that it had asked employees from its Wuhan factory who were already back in Taiwan for the holiday to stay at home.


The company also stepped up health checks at the party, in a Taipei convention center, including providing 35,000 face masks and checking everyone's temperature as they entered the venue.


Since the outbreak, Foxconn workers in Wuhan have been wearing face masks and getting their temperature checked, the world's largest contract electronics manufacturer said.


Mr Terry Gou, the billionaire founder of Foxconn, advised employees not to visit China over the holiday.


"The speed of contagion will be no less than Sars," he said at the party, referring to the severe acute respiratory syndrome outbreak that started in China and killed nearly 800 people globally in 2002-2003.


"I advise everyone not to go to the mainland for this coming new year holiday," he added. For more on this, read the full "The Straights Times" report.


Wikipedia on Foxconn notes that "The largest Foxconn factory is located in Longhua Town, Shenzhen, where hundreds of thousands of workers [230 to 450,000] are employed at the Longhua Science & Technology Park, a walled campus sometimes referred to as "Foxconn City". The park produces the bulk of Apple's iPhone line.


In that light, it's not clear whether a slowdown at Foxconn's Wuhan plant will have any effect on an increase in iPhone production.


While the situation in China over the coronavirus is fluid, at present, the concern over iPhone production in Wuhan possibly effecting iPhone production would appear to be a little exaggerated.


Stay tuned to Apple's financial conference call later today to see if Apple's CEO comments on any production problems at Foxconn and the Wuhan plant specifically.  


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