Apple's contract manufacturer Wistron Corporation could see a 8-9 percent loss in production in India for the month of December due to its plant at Kolar in Karnataka remaining closed due to the recent violence, according to a note by Counterpoint Research.
Losses for Apple, however, would be negligible, the analyst agency said.
Wistron has been manufacturing iPhone SE 2020 at the Kolar plant, along with some older generation iPhones. The plant also manufactures some products for other companies such as Lenovo.
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According to Counterpoint, the iPhone SE contributed to one-third of the overall shipments for Apple in Q3 2020 in the country, when it saw over 5 lakh shipments. However, the share of iPhone SE is slipping due to the strong demand for the new iPhone 12.
"We estimate that Wistron's production losses will be less than 10 percent due to the closure of the factory. However, we believe that going forward, the demand will shift to the newly launched iPhone 12 series and there would be negligible losses for Apple," the Counterpoint note said.
Apple CEO Tim Cook had recently called out a record quarter for the company in India in the September quarter. The December quarter is expected to be even bigger for the iPhone maker in India as per analysts, especially as the company also launched its online platform in the country on September 23 this year.
"For Apple, the losses in revenues will be negligible, because demand for Apple products have slowed down from the peak of the festive season in September and October, and there is inventory to meet demand," Prachir Singh, senior research analyst at Counterpoint said.
"Plus, there has been strong demand for iPhone 12 in India and the share of iPhone SE will fall in overall Apple's shipments," Singh said.
Production loss for Wistron due to the incident will be likely about 8-9 percent for the month of December, Singh added.
The note said that the recent violence at the Wistron facility will have more impact from a reputation standpoint for the Taiwanese company than a monetary loss.
Wistron on Tuesday also slashed the estimated losses from the violence to Rs 26 crore-Rs 52 crore. Wistron had in an FIR with local police claimed losses amounted to Rs 437 crore.
The company intimated the Taiwan stock exchange on Tuesday, adding that there was no material damage to its manufacturing equipment.
(Edited by : Jomy)
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