By Chand Bellur
February 9, 2020 at 6:23 p.m. PDT
- Fear of a coronavirus pandemic has shut down manufacturing facilities, stores, offices, schools and other public places in China.
- Most Apple Store locations in China will remain closed until at least February 15.
- After inspecting Foxconn’s Shenzhen facility, where the iPhone 11 is made, authorities recommend continued closure of the plant.
Chinese Apple Stores Remain Closed
Most of the 42 Apple retail outlets in China remain shuttered due to concerns of a coronavirus pandemic. The disease, first discovered in December 2019, has taken 910 lives worldwide. The SARS epidemic of 2002-2003 killed 774 globally. Although many health experts have urged restraint, claiming the disease is no worse than the flu, efforts are underway to contain coronavirus.
Chinese authorities take the disease very seriously, imposing the death penalty for those who violate coronavirus prevention measures. According to the Asian Nikkei Review:
“Violation of epidemic prevention and control could potentially face the death penalty…”
Foxconn Shenzhen and Zhengzhou Facilities Closed Pending Inspections
Inspections of manufacturing, retail and other facilities are underway, as the virus continues to spread. Authorities consider factors such as population density and ventilation when considering a closure.
Chinese authorities found that Foxconn’s dormitories and eating facilities were overcrowded and poorly ventilated. Their manufacturing facility, however, has air conditioning which would recirculate and spread the virus. The system is critical to a dust-free assembly environment.
Long criticized for cramped and overcrowded working and living conditions, Foxconn may be forced to change the workplace environment for the sake of profitability. Plant closures are costly to both Apple and Foxconn. If dense, poorly ventilated enclosed areas are disease vectors, the company may need to change.
The obvious solution would be to resume production with a limited workforce. It’s not clear whether this would satisfy Chinese officials’ requirements, however.
Dwindling iPhone 11 Supply
If you were planning on purchasing an iPhone 11, you may want to hurry. iPhone 11 supplies are dwindling, and the closure of Apple’s key manufacturing facility may cause shortages.
Apple has already padded next quarter’s revenue estimates by $4 billion. They’re well aware that coronavirus will impact production, however, no one knows the extent of the epidemic.
If conditions deteriorate in China, the disease could be only one problem Apple has to contend with. Growing distrust of the Chinese government over outbreak news suppression could erupt into chaos. In a worse case scenario, Apple and Foxconn could be forced to manufacture elsewhere. Although both have some footprint in India and Vietnam, China remains the center of iPhone 11 production.
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