What you need to know
- Apple's goal of making 45 million AirPods in the first half of 2020 is at risk.
- Suppliers in China have shut down operations for two weeks amid the coronavirus outbreak.
- Assembly in India has also suffered as component supplies have become scarce.
Apple had been planning to ramp up production of AirPods to 45 million units in the first half of 2020 in order to meet rising demand. However, the outbreak of coronavirus in China is causing that goal to begin to seem unrealistic, according to a new report by the Nikkei Asian Review.
The outbreak of coronavirus has caused Apple's suppliers in China to shut down operations for two weeks, and even though work is expected to begin again on Monday, sources have said that components will remain scarce because of the disruption.
"Because of the virus outbreak, it has already been about two weeks since the assemblers have shipped any new AirPods series," said a person familiar with the situation. "All of the stores and carriers selling Apple products are really counting on suppliers to resume work next week."
The halt in production has caused Apple's stock of AirPods to run so low that, according to sources, Apple is reserving most of the stock for its own online and retail stores, a move that is normally reserved for a new product launch. While the regular AirPods are still available for purchase on Apple's own website and in its retail locations, the smash hit AirPods Pro are still on a month-long backorder.
Luxshare Precision Industry, Goertek, and Inventec, the key manufacturers of AirPods in India, have reportedly shut down most production since the lunar new year. Two people familiar with the matter told the Nikkei Asian Review that the plants have barely two weeks worth of components and are relying on China to restart operations in order to keep assembly going.
"One of the big concerns is whether other parts suppliers in China can smoothly resume work to produce enough parts for final assembly," the person said. "We really have to wait and see how things play out next week. If the assemblers could not get enough supply of parts in two weeks, it will be a big problem."
Apple's suppliers in China and India are all expected to resume normal production on Monday.