Dividends and Chinese iPhone production might fall because of COVID-19 curbs: source

Every year a new iPhone comes forth with exciting new features and many people around the world will both upgrade and buy new phones. After they buy the phones, Apple is wonderful company to keep people in their ecosystem of other services, products and subscriptions which helps Apple stock.

In an article by Yimou Lee of Reuters, the iPhone are made by Foxconn in a plant which over 200,000 people work at. The plant is the world’s biggest factory and is located in Zhengzhou which is located in central China. In China the government is trying to isolate and stamp out COVID by imposing very strict shutdowns.

Foxconn is Apple’s biggest iPhone maker, producing 70% of the iPhones shipments globally. The iPhone contract makes up 45% of the Taiwanese firm’s revenue said Taipei based Fubon Research.

Foxconn has plants in Shenzhen and in India, but the majority of the work is done in Zhengzhou.

In China, if the government sees any outbreaks of COVID 19, localities must act swiftly to quell outbreaks including full scale lockdowns. Factories are only allowed to stay open if the people live and work on-site. During the industrial revolution is was not uncommon to see towns have one employer, it is rare in the times we live in.

Linking to dividend paying stocks, all companies are dependent on government and outside suppliers to produce their goods and services. It is a system which has developed over the decades. Generally, governments encourage the company to maintain production and outputs, although in China they have very strict standards. Apple may have a problem with the company delivering supply, when demand is and remains high. As you look at your investments, how does your company manage the supply system?

There are more questions than answers, till the next time – to raising questions.


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