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An Apple Store employee wearing a protective mask cleans the screen of an iPhone inside the US technology giant’s store in the Omotesando area of Tokyo, Japan, on March 15. Photo: Bloomberg

Foxconn assures investors 5G iPhone can still launch this autumn

  • The world’s largest electronics contract manufacturer said it had lost time to disruptions caused by the coronavirus pandemic
  • Apple is already behind major rivals Samsung and Huawei, which started selling 5G smartphones last year
Foxconn

Apple’s most important manufacturing partner, Foxconn Technology Group, has reassured investors it can still get the latest 5G-enabled iPhones ready for an autumn launch, despite the global Covid-19 upheaval.

Foxconn, formally known as Hon Hai Precision Industry, told investors it has lost time to travel restrictions and other disruptions caused by the coronavirus pandemic.

But with months to go before the first trial assembly lines start up in June, Foxconn can still make the deadline, said investor relations chief Alex Yang in a private conference call hosted by Goldman Sachs.

Taiwan-based Foxconn, which makes most of the world’s iPhones, struggled through much of February after the Covid-19 outbreak delayed the return of the hundreds of thousands of workers it needed to assemble iPhones and other electronics products in mainland China.

While the company has since resumed normal operations, the month-long hiatus cast Apple’s carefully calibrated product launch schedule in doubt. Much now depends on the course of the pandemic and a postponement remained very much on the cards, though the new iPhones should emerge in time to catch the crucial holiday season, Foxconn’s Yang said.

Apple supplier Foxconn’s profit down in last quarter of 2019

“We and the customer’s engineers are trying to catch up the missing gap, after we lost some days due to travel ban. There’s opportunity and possibility that we might catch up,” Yang said. “But if there’s a further delay in the next few weeks, months, then you probably have to reconsider launching time. It’s still possible.”

Foxconn, the world’s largest electronics contract manufacturer, said in a statement that Wednesday’s conference call was intended to communicate its thoughts on the latest developments affecting the consumer electronics industry and not focused on any specific products or customer.

The next iteration of Apple’s signature device may well be one of its most important in years – an iPhone that can make full use of the next-generation 5G mobile networks that promise much faster internet speeds.

Apple is already a step behind Android smartphone makers Samsung Electronics and Huawei Technologies, which began selling 5G devices last year.

Covid-19 is now jeopardising Apple’s plans. Mass assembly is only one part of the iPhone maker’s supply chain, which encompasses hundreds of suppliers. Apple and its many partners spend months or even years sourcing individual components that are assembled into final products.

Resumption of work at Foxconn factories in China beats expectations, founder says

Any disruptions to that complex network could slow the introduction of future devices. Trial assembly typically begins in early June and – once finalised – mass production commences in August, according to Foxconn’s Yang.

As China’s largest employer and manufacturer of a plethora of electronics brands, Foxconn encapsulates how the outbreak disrupted the global supply of made-in-China electronics. Apple scrapped its revenue guidance for the March quarter after the contagion disrupted its production chain.

Foxconn was forced to postpone the reopening of its “iPhone City” mega-complex in the central city of Zhengzhou, while it imposed strict quarantine measures on thousands of labourers. The company has since sharply raised signing bonuses to attract new workers and said it reached full seasonal staffing level earlier than an original target of late March.

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