China’s covid curbs may not dent Apple’s good run in India

Fresh covid-19 restrictions in Zhengzhou, which houses iPhone manufacturing facility of Foxconn, will disrupt supply of premium iPhone models, Apple said on Monday.

Analysts said this is likely to affect Apple’s bottom line in markets such as North America and Europe, where December is a major shopping season. In India, however, the shopping season ends in September and October.

Faisal Kawoosa, chief analyst and founder of techARC, said latest iPhones are never the top selling models in India. “Whatever Apple is making in India should fulfil the local demand in the December quarter. The consumption period for iPhone is over. The concern for Apple is Europe and the US due to Christmas shopping,” he added.

Zhengzhou is not the only manufacturing hub in China which faces curbs. The surge in covid-19 cases and China’s zero-tolerance policy led to similar curbs in Guangzhou and Shenzen since October.

According to Tarun Pathak, research director at Counterpoint Research, if the restrictions extend beyond a four-week period, iPhones components used for assembling in India may be impacted. “Sensors, integrated circuits, and other components are likely to be impacted.” Pathak said less than 5% decline in shipments of iPhones is expected in the December quarter.

Furthermore, supply shortages may not amount to a loss for Apple as demand in India is likely to be pushed to the next quarter, he added.Apple started early production of the iPhone 14 models in India at Foxconn’s Sriperumbudur unit in Tamil Nadu and Pegatron’s Chennai factory. “Only iPhone 14, iPhone 13 and iPhone 14 Plus are being assembled here. Except iPhone 13, demand is less as the buying season is almost over,” said Navkendar Singh, associate vice president for device research, IDC India, South Asia and Australia and New Zealand.

Mint reported in April that Apple may surpass last year’s iPhone shipments in India in 2022. According to IDC, in 2021, Apple shipped 4.8 million iPhones in the country, which is likely to grow to 5.5-6 million.