China's coronavirus might disrupt Apple's production plans for the iPhone

Photo by Tomohiro Ohsumi/Getty Images

Chinese tourists wearing masks use smartphones in the Ginza shopping district on January 24, 2020 in Tokyo, Japan.

• Apple's supply chain could be seriously disrupted by the outbreak of the coronavirus in China, sources told Nikkei Asian Review.
• The virus has hit just as Apple was reportedly preparing to start manufacturing a new smaller, cheaper iPhone model.
• Most of Apple's supply chain is in China and the company's biggest manufacturing plant is in Henan province, which borders on Hubei province where the outbreak originated.
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It looks like the rapid spread of the coronavirus in China could sting Apple's iPhone supply chain, according to a report from Nikkei Asian Review.

An anonymous supply chain executive told Nikkei the coronavirus - the current death toll for which stands at 106 at the time of writing - could make meeting production deadlines difficult.

"The [coronavirus] situation in China could affect the planned production schedule," said the executive.

Apple is reportedly gearing up to start manufacturing a new model of iPhone that's smaller and cheaper than the current generation, with rumors circulating that the new model will have a 5.4-inch screen and come out in fall of 2020.

But the new more affordable iPhone could be hit by the disruption, with two sources telling Nikkei that although production was meant to start in the third week of February, that could change due to the outbreak.

Apple has also been on a more general production drive according to Nikkei, with industry sources saying 80 million iPhone units have been ordered for the first half of 2020 - up more than 10% from last year.

Wuhan, the city where the virus first originated, is currently on lockdown and five more cities in Hubei province have brought in restrictions on gatherings and transport. Nikkei notes that Apple has its main manufacturing centers in neighboring Henan and nearby Guangdong provinces. Henan contains Apple supplier Foxconn's massive Zhengzhou factory, which employs upwards of 350,000 people and produces more than half of the world's iPhones.

Last week Foxconn CEO Terry Gou advised Wuhan employees visiting Taiwan for the Lunar New Year not to return to China. "I advise everyone not to go to the mainland for this coming new year holiday," he said.

Business Insider has contacted Apple for comment.

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