Tech
Foxconn Protest Risks iPhone Shipments, Harming Apple Shares
(CTN NEWS) – Foxconn – The severe COVID-19 regulations that have troubled the largest Apple iPhone factory in the world have fueled employee unrest.
Interrupting production in time for the Christmas and Lunar New Year holidays forcing numerous employees to leave the facility.
Foxconn might potentially see more than 30% of the facility’s November production disrupted with Wednesday’s escalation.
The source added up from an internal estimate of up to 30% when the labour concerns first surfaced in late October.
According to the insider, it is unlikely that complete production will restart by the end of this month as the plant is the only one that produces luxury iPhone models, including the iPhone 14 Pro.
Hon Hai Precision Industry Co., the previous name of Foxconn, declined to comment. Despite having employees at the site, Apple claimed on Thursday, a request for comment on Friday went unanswered.
Victoria Scholar, head of investment at Interactive Investor, said, “the worker upheaval at Foxconn’s facility in China could impact Apple’s Nov iPhone deliveries.”
Shared some thoughts with @graemewearden at the Guardian @BusinessDesk blog about how the unrest at Foxconn in China could potentially weigh on #Apple's iPhone shipments
Shares in Apple currently down 1.3% pre-market https://t.co/NjraFWpZk0
— Victoria Scholar (@VictoriaS_ii) November 25, 2022
As worries about Apple’s capacity to meet the demand for the busy holiday season mount.
In late morning trade on Friday, Apple shares (NASDAQ: AAPL) were down 1.9%, while the benchmark Nasdaq index was down 0.3%.
“One of the tech sector’s more resilient equities is still thought to be Apple. Apple, meanwhile, continues to refrain from offering formal counsel in light of the macroeconomic unpredictability, “Scholar tacked on.
High-end iPhones are anticipated to be in short supply at stores this holiday season, according to U.S. Best Buy Co Inc (NYSE: BBY), which stated this on Tuesday.
Reuters last week stated that analysts said that sales of iPhones at Apple outlets in the United States during the Black Friday shopping season were also down from a year ago and that it was taking longer to restock stockpiles.
Hundreds of workers joined protests at Foxconn’s major iPhone plant in China’s Zhengzhou this week, with some men smashing surveillance cameras and windows, footage uploaded on social media showed.
Reduced Shipments
According to KGI Securities analyst Christine Wang, if the current problem persists through December, approximately 10 million iPhone production units will be lost.
Resulting in a 12% decrease in iPhone shipments in the last quarter of 2022.
In preparation for the holiday shopping season, Wedbush Securities forecasts that many Apple outlets currently have 25% to 30% fewer iPhone 14 Pros than usual.
Apple said it expected fewer shipments of the iPhone 14 Pro and iPhone 14 Pro Max than it had previously predicted in a statement on Nov. 7.
Foxconn recently hired new employees, and some grumbled that they had been misled about the factory’s pay and benefits, while others griped about living in dorms with coworkers who had tested positive for COVID.
Foxconn offered to protest new hires who agreed to resign and depart 10,000 yuan ($1,400) as compensation on Thursday after apologizing for a “technical issue” involving salary upon hiring.
More than 20,000 employees, many of them were recent hires who weren’t yet working on production lines, allegedly grabbed the money and went.
Videos shared on Chinese social media on Friday revealed crowds and prolonged lines of workers waiting for buses while carrying a lot of stuff.
One guy wrote on social media, “It’s time to go home,”
Before its problems started, the facility employed more than 200,000 people. There are dorms, restaurants, basketball courts, and a football field on its huge 1.4 million square foot (15 million square metres) property.
Although they did not specify how many new hires had departed the site, another Foxconn source with knowledge of the situation claimed that some had.
According to this person, the production would not be further harmed by the people departing because they had not yet received training or started working.
“The issue significantly affects our reputation but not our (present) capacity. Our capability as it is now is unaffected, “explained the source.
“There is only so much that corporations can do to avert pandemics. It has long been an issue. Everyone struggles with this issue, ”
The speaker cited additional instances of employee unrest brought on by rigorous COVID regulations, such as turmoil at Quanta, another Apple supplier, in May.
Shares of Foxconn ended the day down 0.5%, trailing the overall market, which finished flat.
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