Apple’s factories are running

BEIJING (Reuters): As China reopens its economy after months of lockdown, Apple Inc’s (AAPL.O) iPhone factories are largely up and running.

But with the coronavirus pandemic spreading across the world, the urgent question for the company is how many buyers there will be both for current models and the new slate of phones expected in the fall.

A senior official at one of Apple’s major contract assemblers said Apple’s orders for the quarter ending in March are likely to drop 18% compared with the previous year. The production ramp-up for new phones that work with next-generation 5G networks has been postponed, this person said, though it is still possible the 5G phones could launch as scheduled in the fall.

“No one is talking about manpower or material shortage (in China) anymore. Now everyone is looking at whether demand from U.S. and Europe could keep up,” said the person, who has direct knowledge of the matter. “The focus now is the demand from consumers in the U.S. and Europe.”

One of Apple’s key display suppliers is preparing for a similar level of contraction, according to a person familiar the matter.

The company had anticipated shipping 70 million iPhone displays this year, but is now considering lowering that target by more than 17% to 58 million units.