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Apple says iPhone production hit by China Covid lockdown

Photo: Hector Retamal / AFP

| By AFP |

Apple warned customers would face longer wait times for iPhones with the holiday season approaching, after Covid restrictions in central China “temporarily impacted” production at the world’s largest factory producing the smartphone.

Foxconn, Apple’s principal subcontractor, locked down its massive factory in Zhengzhou last month after a spike in infections — in line with China’s zero-Covid policy. 

In a separate statement Monday, the Taiwanese firm said its fourth quarter earnings this year would take a hit from the coronavirus lockdowns.

Panicking workers last week had fled the site on foot in the wake of allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

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“Covid-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China,” California-based Apple said in a statement late Sunday.

“The facility is currently operating at significantly reduced capacity.”

Despite strong demand for Apple’s products ahead of the holiday season, “we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated”, it said. 

“Customers will experience longer wait times to receive their new products.” 

Foxconn is China’s biggest private sector employer, with more than a million people working across the country in about 30 factories and research institutes.

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But Zhengzhou is the Taiwanese company’s crown jewel, churning out iPhones in quantities not seen anywhere else.

“In a normal situation, almost all the iPhone production is happening in Zhengzhou,” Ivan Lam, an analyst with specialist firm Counterpoint, told AFP.

The company was initially “cautiously optimistic” about its fourth quarter earnings, it said. 

“But due to the pandemic affecting some of our operations in Zhengzhou, the company will ‘revise down’ the outlook for the fourth quarter,” Foxconn said in a statement. 

“Foxconn is now working with the government in (a) concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible,” the company said. 

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It did not give any statistical projection for how badly it expected earnings to be hit.

“This is a dark sign of the zero-Covid policy in China impacting production for Apple with Foxconn,” Dan Ives, analyst at Wedbush Securities, told AFP.

“It confirms the Street’s fears with Apple this quarter and will be an albatross on the tech market this week.”

‘We are drowning’

Local authorities locked down the area surrounding the factory on Wednesday, but not before reports emerged of a lack of adequate medical care at the plant.

Multiple workers have recounted scenes of chaos and increasing disorganisation at Foxconn’s complex of workshops and dormitories, which form a city-within-a-city near Zhengzhou’s airport.

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“People with fevers are not guaranteed to receive medicine,” a 30-year-old Foxconn worker, who asked to remain anonymous, told AFP.

“We are drowning,” he said.

China is the last major economy wedded to a strategy of extinguishing Covid outbreaks as they emerge, imposing snap lockdowns, mass testing and lengthy quarantines despite the widespread disruption to businesses and international supply chains.

And authorities poured cold water on speculation that the policy could be relaxed Saturday, with National Health Commission (NHC) spokesperson Mi Feng saying that Beijing would “stick unswervingly to… the overall policy of dynamic zero-Covid”.

“At present, China is still facing the dual threat of imported infections and the spread of domestic outbreaks,” Mi said at a press briefing.

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“The disease control situation is as grim and complex as ever,” he said. “We must continue to put people and lives first.”

International

Mexico requests extradition of ‘Mini Lic’ for murder of journalist Javier Valdez

The Mexican government has requested the extradition of Dámaso López Serrano, a former high-ranking member of the Sinaloa Cartel, who is accused of masterminding the 2017 murder of Mexican journalist Javier Valdez, the Attorney General’s Office announced on Tuesday.

López Serrano, known as “Mini Lic,” was arrested last Friday in Virginia, United States, on charges of fentanyl trafficking, a crime he committed while on parole.

“This is the key issue for us, he [López Serrano] is the mastermind of this murder. The rest of the perpetrators are already processed and in jail, he was the one missing,” said Attorney General Alejandro Gertz.

“We immediately made the extradition request,” the official added during the routine morning press conference of President Claudia Sheinbaum.

Valdez, an award-winning reporter specializing in drug trafficking and correspondent for AFP and the newspaper La Jornada, was murdered on May 15, 2017, in front of the office of his magazine Riodoce in Culiacán, the capital of Sinaloa state.

“Mini Lic” was originally arrested in 2017 when he voluntarily turned himself in to U.S. authorities and pleaded guilty to trafficking methamphetamine, heroin, and cocaine. In 2022, he was released on parole.

Gertz confirmed that the Mexican Attorney General’s Office had requested López Serrano’s extradition “countless times,” but Washington had declined to act on the request because he had become a “protected witness” for the U.S. government and “was providing a lot of information.”

“Now, with this situation where they themselves are acknowledging that this individual is still committing crimes, I think there are more than enough reasons for them to support us,” the prosecutor added.

The Sinaloa Cartel is one of the largest drug trafficking organizations in Mexico and was founded by Joaquín “El Chapo” Guzmán, who is serving a life sentence in the United States.

Culiacán has been shaken by a wave of murders since the arrest of Ismael “Mayo” Zambada, another key leader of the cartel alongside Guzmán, on July 25 in New Mexico, United States.

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International

Cuba’s government stresses openness to serious, respectful U.S. relations

Cuba reiterated on Tuesday its willingness to engage in dialogue with the United States, just weeks before Republican President Donald Trump assumes office. During his first term, Trump halted the historic rapprochement between the two countries, which had been initiated just ten years earlier by Democrat Barack Obama.

“It will not be Cuba that proposes or takes the initiative to suspend the existing dialogues, to suspend the existing cooperation. Not even the discreet exchanges on some sensitive issues,” said Cuban Deputy Minister of Foreign Affairs Carlos Fernández de Cossío at a press conference in Havana.

“We will be attentive to the attitude of the new government, but Cuba’s stance will remain the same as it has been for the last 64 years. We are willing to develop a serious, respectful relationship with the United States, one that protects the sovereign interests of both countries,” he added.

His statements come on the occasion of the tenth anniversary of the historic rapprochement announcement between Washington and Havana.

On December 17, 2014, Cuban leader Raúl Castro (2006-2021) and Barack Obama (2008-2016) announced the beginning of a thaw in relations, which led to the restoration of diplomatic ties in 2015, after more than half a century of confrontation.

This process of thawing bilateral relations was later halted by businessman Donald Trump, who significantly reinforced economic sanctions against the communist-ruled country. The Republican will return to the White House on January 20.

Cuba, under a U.S. trade embargo since 1962, was re-listed in 2021 on the “blacklist of countries supporting terrorism,” blocking financial and economic flows to the island of 10 million inhabitants.

Subsequently, the administration of current Democratic President Joe Biden made only slight adjustments to the sanctions and also kept Cuba on this list. However, his administration resumed bilateral contacts with Havana on migration issues and the fight against terrorism.

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International

Mexican government to use church atriums for gun surrender program to combat violence

The atriums of Mexican Catholic churches will be used for the voluntary surrender of weapons in exchange for economic and legal incentives as part of a plan announced on Tuesday by the government to reduce violence.

According to the Mexican government, there is a link between the illegal trafficking of weapons—almost entirely coming from the United States—and the spiral of criminal violence that has plagued the country since late 2006, when a controversial military anti-drug offensive was launched.

“The idea is to set up areas in the church atriums where people can voluntarily surrender their weapons, and in return, they will receive financial resources based on the weapon they are turning in,” explained President Claudia Sheinbaum during her regular press conference.

The left-wing leader emphasized that the program, called “Yes to Disarmament, Yes to Peace,” guarantees that those who surrender their weapons will not face any “investigation.”

“What we want is to disarm. This will be implemented next year. We also did it in Mexico City, and it had significant results,” added the former mayor of the capital, with a population of 9.2 million.

The disarmament plan is part of the government’s “comprehensive security strategy,” one of whose pillars is promoting a culture of peace, especially in regions severely affected by organized crime violence, Sheinbaum pointed out.

More than 450,000 people have been murdered in Mexico since the government launched its military-led anti-drug operation, alongside about 100,000 people who have gone missing.

Despite being a secular state, the Mexican Catholic Church has played a key role in efforts to contain violence, with priests acting as mediators between citizens and criminals. Several clergy members have been killed for this cause.

Just last week, the Catholic hierarchy called on cartels to declare a truce in their violent actions during the celebration of the Virgin of Guadalupe on December 12 and the upcoming Christmas holidays.

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