Coronavirus Cloud New IPhones Schedule

Travel restrictions to China due to the coronavirus have come just as Apple Inc. engineers often fly to Asia to perfect the production of new iPhone this fall, former employees and supply chain experts told Reuters.
Large-scale manufacturing is not scheduled until summer, but the first months of the year are when Apple lubricates assembly processes with partners such as Hon Hai Precision Industry Co’s Foxconn, two former Apple employees said.
“They probably have an assembly line where they are testing things,” said one of the former employees who asked not to be identified.
“Are Apple engineers with Foxconn engineers? If they are, they are probably moving forward. But if they are not, if they are in quarantine, it could be bad.”
While Apple uses other manufacturers such as Wistron Corp to make some iPhone, the Taiwanese Foxconn is usually in charge of introducing new models because their capabilities are the most advanced, experts in the supply chain said.
Foxconn, the world’s largest electronics contractor, delayed the reopening of key iPhone factories in Shenzhen and Zhengzhou after the Lunar New Year holidays, but expects to resume half of its Chinese production in late February.
Numerous senior Foxconn officials who have been working remotely from Taipei since the holidays have not yet returned to China, a person with knowledge of the matter told Reuters.
Apple declined to comment. Foxconn Technology Group said in an email statement on Tuesday that the company is following all the health and safety practices legally required in its factories to protect the welfare of employees.
“In line with this, we are taking a cautious approach in the application of our production programs after the holidays at each of our facilities in China,” the company said.
Last week, Apple warned investors that the company was unlikely to meet revenue targets for the first three months of 2020 and that global iPhone supplies would be limited since factories in China were not increasing production so Quickly as expected.
Foxconn said this month that the coronavirus outbreak would reduce its revenue this year.
Earlier this month, United Airlines, which has revealed that Apple is an important customer, said it would cancel all flights to China until the end of April. Apple, meanwhile, said on January 28 that it limited the travel of its employees to China to “business-critical” situations.
For the new iPhone models, the transition from the prototype to the assembly of millions of units really begins when the Lunar New Year holiday in China ends in late January and early February, according to sources familiar with the process.
At that time, Apple has tested numerous prototypes and is in the final stages of what is called engineering validation, in which Foxconn workers assemble a small number of devices while the engineers of both companies solve the problems.
If there are delays at this stage, it would consume the time that Apple needs to finalize orders for microprocessors and other parts, almost all of them custom-made for the iPhone.
Because of the huge volumes that are needed, “they can’t wait to make component selections,” said Ron Keith, founder of Supply Chain Resources Group, which works with electronics manufacturers like Nest, owned by Alphabet Inc.
In March and April, Apple engineers often work with their Foxconn counterparts to establish new assembly lines and do tests, before making final adjustments in April and May. The objective is to have production lines in progress in June so that others can be added progressively in order to increase production.
“It’s very complicated. There are many variables in the environment, including small factors such as air pollution,” said one of the people familiar with the process.
Anna-Katrina Shedletsky, former Apple engineer and founder of Instrumental, a startup focused on factory automation based in Mountain View, Calif., Said engineering collaboration in the field was critical to new products.
“You can take those engineers to another place but there is knowledge about how to make a product in that place. It’s not that it can’t be taught, but it’s something difficult to move,” he said.
Although supply chain experts and industry insiders say Apple still has time to meet its annual iPhone manufacturing program, travel restrictions have left it in a difficult situation.
“The face-to-face work is not being done,” said an executive at a semiconductor company that caters to smartphone companies and works with equipment in China, referring generally to phone production cycles.
“And the truth is that it probably won’t change for another month, at the earliest. You’re really talking about two months lost, which in the consumer electronics cycle is (a time) huge.”

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