Apple is still in big trouble in China

Apple has also asked suppliers to accelerate product development to make up for lost time. According to many sources, in the worst case, this could affect the production schedule and the initial volume of product delivered to the market.

“It’s hard to make up for lost time. Apple and its suppliers are working around the clock to speed up development,” said an executive at an Apple supplier.

Recently, Apple also issued a warning that the closure of many cities in China has disrupted production of the company’s phone models. It is estimated that that could reduce the company’s revenue by as much as $8 billion this quarter.

iPhone assemblers, including Foxconn and Pegatron, will be responsible for a process known as New Product Introduction (NPI). During this process, Apple and its suppliers will outline the manufacturing process to turn its latest designs into actual products, thereby proceeding to mass production.

NPI is followed by a series of verification processes, executed on a tight schedule in order to meet Apple’s desired timeline. After that, suppliers will start mass production, usually starting around the end of August.

Previously, Pegatron’s iPhone assembly plants in Shanghai and Kunshan had to suspend operations for several weeks, due to the outbreak of the Covid-19 epidemic. On May 16, the factory in Shanghai was licensed to operate again under strict management.

Some sources say that four new Apple phone models are in the process of technical verification test (EVT). During this phase, suppliers will design the mechanical parts and manufacturing processes for the new iPhone, and create a Bill of Materials (BOM) to calculate manufacturing costs. However, according to Nikkei Asia, one of these four versions was about 3 weeks behind the original schedule.

Normally, all new iPhone models complete the EVT process and go into the verification phase by the end of June. That gives the company time to get everything ready, ready for mass production by the end of June. end of August or first week of September.

“If development can be accelerated and taken to the next level around the end of June or early July, the company can still meet the time of mass production in early September. However, this depends on whether the process can be accelerated soon,” said a supply chain expert.

Talking to Nikkei Asia, Eddie Han, an analyst at Isaiah Research, said that the prolonged shutdown in China has caused a big obstacle to Apple’s product development process.

“The resumption of production will not progress well because there are still many restrictions on living and moving, even if these production sites can operate closed. Currently, the above delay has not been mentioned. potentially impacting the product launch schedule. However, we still need to watch it closely to assess the long-term effects,” Han said.