An explosion rocked the Foxconn plant in Chengdu, China last night, killing 2 people and injuring 16 others. Both Apple and Foxconn have issued statements on the tragedy, but how the explosion will affect iPad production is unknown.
The explosion took place at around 7PM yesterday, with the situation being brought under control by the fire department shortly thereafter. Apple expressed their concern for the families affected in the blast, saying:
“We are deeply saddened by the tragedy at Foxconn’s plant in Chengdu, and our hearts go out to the victims and their families. We are working closely with Foxconn to understand what caused this terrible event.”
Foxconn expressed their own concern, and stated that production at the plant has been halted until an investigation into the cause of the explosion is complete. However, confusion about just how much of Apple’s iPad production was done there has analysts weighing in on how Apple’s bottom line will be affected. RBC Capital Markets analyst Mike Abramsky estimates:
“…the business impact of the explosion on Apple’s bottom line, saying that the worst-case scenario is that if most of the iPads are manufactured at Chengdu where the explosion occurred, it could reduce production of the iPads by between 1.8 and 2.8 million units, “which is 22-36% of our expectations for 8 million iPad shipments in Q3.
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The best-case scenario for Apple in this tragedy is if it turns out the majority of iPads produced by Foxconn are made at their Shenzhen plant. But even the best case is bad news, especially for the victims caught in the middle. [Mashable]