KEY POINTS

  • Apple wants to increase the production of its iPhones for the first half of 2020, according to a new report
  • However, due to the recent coronavirus outbreak in China, Apple's supply chain might be affected
  • The potential disruption in Apple's supply chain could affect the launch of its upcoming iPhone models particularly of the iPhone SE 2

Apple is anticipated to release the much-awaited entry-level iPhone SE 2 in the first quarter of 2020 and the iPhone 12 series in the third or fourth quarter of this year. The Cupertino tech juggernaut has asked its suppliers to amp iPhone production by 10 percent for the first half of the year. But, the recent outbreak of coronavirus in China could possibly disrupt Apple’s supply chain.

Apple iPhone Supply Chain Disruption

The deadly virus outbreak that is rapidly spreading in China and other countries originated in Wuhan, China. Analysts are now anxious that the recent coronavirus breakout could affect the supply chain of various tech companies, particularly that of Apple. Hon Hai Precision Industry Co. and Pegatron Corp are among the primary companies in charge of producing Apple iPhone models in China. 

Both companies are located approximately 500 kilometers away from Wuhan. Although the facilities are located far from the center of the outbreak, it does not mean that they are immune or safe from this deadly virus. The iPhone 12 series is anticipated to launch in Sep. 2020, so it is less likely affected by any issue happening in China right now.

Apple Store China A boy holds a Chinese flag as he walks past an Apple Store undergoing renovation in Beijing, July 18, 2018. Photo: WANG ZHAO/AFP/Getty Images

However, Apple is also reportedly planning to release its entry-level iPhone SE 2 in the first quarter. Dan Ives of Wedbush Securities Inc. recently told Bloomberg that if employees of Foxconn and other Apple manufacturing hubs in China are restricted, the supply chain could be disrupted. If the outbreak in China spreads, it could negatively affect the supply distribution, which could be a major worry for investors, he added.

Apple Wants iPhone Production Increased

A few days ago, several reports claimed that the Cupertino tech giant is planning to increase the production of its iPhones by 10 percent in the first six months of the year. Apple reportedly asked its suppliers to produce up to 80 million iPhones. Nikkei Asian Review reports that Apple has 65 million booked orders for older iPhone models.

Additionally, the site claims that Apple has up to 15 million booked units of the new affordable iPhone model, which could arrive in the third week of Feb. 2020. The publication also reports that the release of the iPhones might meet some delays because of the outbreak. Apple CEO Tim Cook recently shared a tweet last weekend stating that Apple “will be donating to groups on the ground helping support all of those affected” by the virus.