Apple’s supply chain still struggling to return to normal even as China recovers from the pandemic, report says

  • Even though the coronavirus outbreak seems to be under control in China, Apple’s supply chain is still struggling to get back to normal as the pandemic worsens around the globe, according to a new Bloomberg report.
  • Apple relies on suppliers and teams located in other areas of Asia like Malaysia as well as Europe, Israel, and the United States for key iPhone components as well.
  • But the iPhone 12 has not been delayed so far, as Bloomberg reports that mass production isn’t expected to begin until May.
  • The report also comes as Apple launched two new products this week, a new iPad Pro and MacBook Air.
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China, which is home to much of Apple’s supply chain, appears to be recovering from the coronavirus, as the country reported no new domestic cases of the virus on Thursday for the first time since the outbreak began.

But Apple’s supply chain is still far from functioning normally, as other countries around the globe where Apple’s suppliers are located – like those in other parts of Asia, Europe, and the United States – struggle to contain the virus, as detailed in a new report by Bloomberg.

Operations are still moving slower than usual within Apple’s supply chain because any disruption to components sourced from around the world can throw off the entire system, the report notes.

A lockdown in Malaysia has impacted some suppliers that make chips and circuit boards for Apple, while engineers that work on Apple’s cellular modems are based in Germany and plants that produce power management chips are located in Italy, Germany, and the United Kingdom, the report says.

Hundreds of Apple’s research and development engineers that work on processor technology are also located in Israel, according to Bloomberg, and Apple also relies on suppliers in the United States, like glass maker Corning and wireless chip providers Broadcom, Skyworks Solutions, and Qorvo.

Apple did not immediately respond to Business Insider’s request for comment.

Europe has been hit particularly hard by the outbreak; Germany, France, and Spain all had more than 10,000 reported cases as of March 20 and have imposed lockdowns to curb the spread. Israel has confirmed more than 700 cases, according to Israeli newspaper Haaretz, and instituted a 14-day quarantine for all new arrivals on March 9, as the BBC reported. The United States now has 211 reported deaths from the coronavirus among more than 14,300 cases across all 50 states.

Still, the report notes that Apple’s iPhone 12 likely hasn’t been impacted by the coronavirus yet since mass production doesn’t begin until May. However, that could change as Apple may face challenges when testing new products, since that typically requires engineers to travel to China to finalise designs, according to the report.

The company did launch two new products this week, a refreshed MacBook Air with a redesigned Magic Keyboard and a new iPad Pro with a Lidar sensor for augmented reality. But, as Bloomberg notes, production for those products likely began in January.

It’s not just Apple’s supply chain that has felt the ramifications of the ongoing coronavirus outbreak. Apple has temporarily closed all of its retail stores outside of China until further notice as part of an effort to mitigate the spread and protect staff and employees.

Apple warned retail employees in early March to brace for a shortage of replacement iPhones amidst supply constraints, as Bloomberg also reported at the time. Now, the company is only allowing customers to purchase two units of the same iPhone model on its online store in regions such as the US, UK, and China.

Apple also cancelled the physical event for its annual Worldwide Developers Conference, its biggest event of the year other than its September iPhone launch, and warned investors that it expects to miss its revenue target for the March quarter.