Let's get now to Lad sever of Bloomberg Tech editor joining us from Tokyo. With Apple cutting its outlook for iPhone shipments after China lockdowns affected operations at a supplier's factory. So the disruption coming at a bit of a crucial time for Apple. Lad. But is it really that we are not seeing demand or is it just the fact that these lockdowns are really going to affect operations and production and rollout of the new iPhones. It isn't the
crucial time. This is the peak season for iPhone production. The company foxcon It's main supplier. They're both building up for the holiday shopping season. There are holiday festivals such as November leventh in China. Now, the mix of supply and demand that is really the tricky question here. Um. If you look at analysts addressing specifically the China market is the biggest model market in the world, they are seeing Apple's iPhones sales dropping at an accelerating rate, much
more so than in previous years. And there is strong indication that the regular non pro models um I thinking a lot lower demand this and it has to do a lot with China's own economy and the global economy is sewing down. What Apple said in this statement with with this production disruption is that it is still seeing strong demands for the iPhone Forward in Pro and I Refording Promax. These are the models that are manufactured at
that Jango facility which is currently on the lockdown. UM. But the company and Foxcone itself are saying the bringing optimistic notes so to say that the current lockdown is scheduled to end on November ninth, UM and after it they should be able to get back on track. Um. They speak more about delays two people's orders rather than
so much uh losing shipments over the first quarter. So is this a story then that is just going to be of of the fourth quarter and potentially the first quarter if we do start to see a relaxation of COVID zero rules. What is Hornhei telling us about their outlook for the quarter? It's uncertain. Um, As you say, nobody really has a great idea, because I mean, this is lockdown and came out of nowhere. It wasn't in advance.
It was an action that actually followed some disruption and the facility itself because Harnhei wasn't able to manage it. Uh in an ideal fashion. So these disruptions, the really tweecky thing with them is that uncertainty. Uh in terms of when we start to see I guess a little bit more of a pickup. We know that Apple has has paused hiring for many jobs outside research and development.
We're talking about these Wall Street Journal reports of Meata, you know, pausing hiring too, and other job cuts coming through in the tech space. How much of a slowdown are you hearing is happening in the tech sector regardless of the lockdowns in China. Um, well, it's exactly to say, it does seem to be reaching all over the industry. UM. I suppose if there is going to be any sort of tonic is going to be all the Twitter engineers are now currently available and probably really easy to hire
for other companies. But aside from and um, there is that the stronger focus on efficiency of spending where there it is, as you say, Apple, Meta, etcetera. UM. For Apple and folks colon specifically, they will be hoping for this issue, at least on the supply side, to be resolved much sooner than the first quarter. But then the man side is really going to be tied into the global economy and consumer sentiments. TAG and consumer electronics are very much tied to that. The iPhone is kind of
a bare weather for that. If things are going great, you'll see more iPhone sales. If they're not, people suffer as well. Yeah, in terms of also the impact of China's lockdowns and the impact that it's having on its own economy and company's desire to actually manufacture there, we saw Apple adding that new iPhone fourteen maker in India. How much of a shift do you think that we are going to see Apple gradually diversify the geography here
of a supply chain. That's right, That's right Apple again, UM for force in production with Pegotron, another one of his Taiwanese partners in India. And it's worth saying this wasn't triggered just by the current issues. It's these are things that I planned months and months, maybe years in advance. UM. It has accelerated this year. Specifically India production of the iPhone came only weeks UM a few weeks after the launch and very close to the start of China production,
which is much much improved on previous years. We can probably anticipate that growing India is really pushing to bring in small phone manufacturing, electronics manufacturing within its borders. And the iPhone is the thing that everyone wants to have and and it is putting forward financial incentives for the likes of Pegotron and fox Con to put more production there. And let's be fair, um, the current lockdowns and situations in China, they probably not Jappo in that direction too.
And just a very quick final word, I mean you mentioned it's a bit of an indicator because if people are buying a new iPhone, then they're doing okay. If they're not, then they are worried about the future. What's the kind of I guess earnings outlook that you're seeing or hearing from analysts. You put it really nicely there, but by the way, better than I did earnings outlook
for for Apple and elsewhere. I mean, at the moment, just because of the redundancy and the strength of Apple supply chain systems, UM, I wouldn't expect like a huge drop off just because of these current lockdowns. There is redundancy, especially for the regular iforms rather than the pro models. UM, so we we can again, I would actually lean back to uncertainty. There is a lot of uncertainty going forward. Alright, flat always a pleasure of Lad Sapper of Bloomberg Tech Editor with us from Tokyo,