China’s COVID Lockdowns May Affect iPhone Shipments 
Because Apple outsources production to Chinese factories, consumer prices may rise as shipments of certain models are delayed 
San Francisco — The Apple Store at Union Square, the heart of San Francisco’s upscale tourist district, had drawn more than 30 customers within a few minutes of opening Friday morning. Visitors, couples and even a preschool-age boy browsed the atrium packed with iPhone 13s and watches to try out. A sign urged people to trade in old phones to save money on the 13s. But a staff member could not say when the iPhone 14 would come out — presumably sometime this year — or what it would cost. Some shoppers wondered whether it would be delayed or cost more than expected given the months of supply chain disruptions in China, where the phones are made. “This stuff has got to hit hard at some point,” said Bill Kimberlin, an Apple Store shopper from San Francisco. Apple, based in the Silicon Valley, just 50 miles south of San Francisco, outsources iPhone parts from around East Asia, and its handsets are assembled in China. Apple had to delay product rollouts first in 2020, when new gear was held up for a month because of China’s first COVID-19 wave, said Rachel Liao, senior industry analyst with the Taipei-based Market Intelligence & Consulting Institute. In the first quarter this year, she said, lockdowns in China suspended assembly plants, including at least one operated by Pegatron. Pegatron is the No. 2 iPhone assembler, with 25% of orders, after Foxconn. Both companies are based in Taiwan but manufacture in China. Supply chain upsets set off by China’s lockdowns in the major commercial hubs Shenzhen and Shanghai are slowing exports of products ranging from phones to building materials to motor vehicles. Western nations are experiencing shortages and higher prices imported goods. Chinese authorities ordered Shenzhen shuttered in March, and Shanghai, with a population of about 26 million, closed weeks later. Those closures have kept workers away from factories, delivery jobs and seaports. Cities are locking down as part of Chinese President Xi Jinping’s “zero-COVID” policy, aimed at controlling deaths from the coronavirus.