Apple's development of at least one new flagship iPhone this year is behind schedule due to China's month-long outbreak control. Apple has asked suppliers to speed up product development to make up for lost time, multiple people familiar with the matter said. At worst, this could affect the production schedule and initial output of new phones.

According to Nikkei Asia, an executive at an Apple supplier said that despite the easing of epidemic control, the impact on the supply chain continued. "It's challenging to make up for lost time...Apple and its suppliers are working around the clock to speed up development." The pace of resumption in Shanghai is "quite slow."

Apple has warned that China's outbreak control has disrupted production of existing models and could hit its revenue of as much as $8 billion this quarter.

The main iPhone assemblers Foxconn and Pegatron are responsible for the New Product Introduction (NPI) process. In the process, Apple and its suppliers outline the manufacturing process that turns the latest designs into actual products for mass production. The NPI is followed by a series of verification processes on a strict schedule to meet Apple's desired mass production time, which is around the end of August each year.

Pegatron's iPhone assembly plants in Shanghai and Kunshan -- the main centers of the company's Apple-related business -- had to shut down for several weeks due to the outbreak. Its Shanghai plant was allowed to resume production under closed-loop management on May 16. Apple had hoped that the development of new iPhones this year would go smoothly, considering the outbreak in China appeared to be under control and suppliers were used to operating under strict controls.

Currently, the four new phones are in the Engineering Validation Test (EVT) stage, according to people familiar with the matter. At this stage, suppliers design mechanical parts and manufacturing processes for the new iPhone, and develop a bill of materials (BOM) to calculate manufacturing costs. However, due to the control measures in Shanghai, the process for one of the models is about three weeks behind the normal schedule.

Typically, all new iPhones have until the end of June to complete EVT and enter the verification phase. This gives time to be ready for mass production by the end of August or the first week of September. "If the development process can be accelerated and move to the next phase in late June or early July, it should still be possible to meet the mass production deadline of early September," said another person familiar with the matter. "But it really depends on this Whether the process can be accelerated very quickly.”

Eddie Han, an analyst at Isaiah Research, said the ongoing controls are an obstacle to getting development back on track. “The resumption of production is not going well because there are still many restrictions on living and going out in the Shanghai area, even though these production sites can operate in a closed loop. At the moment, we don’t think this delay will immediately affect the timeline for product releases, but we need to Keep an eye out for some hidden and long-term effects."

Chiu Shih-fang, a senior supply chain analyst at the Taiwan Institute of Economic Research, was similarly cautious. “Although Shanghai and its surrounding areas have resumed work, the operation of the entire supply chain in China has not returned to normal. This will not only affect production, but also the development of new products, which is understandable. It will take at least one month for the supply chain to recover. two months."

Apple, Pegatron and Foxconn declined to comment to Nikkei Asia.