Apple has always had more than its fair share of critics, and even when their sales were in the millions, we still heard analysts saying they failed for not reaching expectations. After the iPhone 5 came out, speculations about how the iPhone business has lagged were rife. Whether or not you hold with the critics, the fact remains that the iPhone is a pretty darned good phone!
Then came the talk about Foxconn freezing hiring. As can be expected, critics jumped on this, blaming the slow iPhone 5 sales. As if that were not enough, there have also been reports that Foxconn has put a stop to its plans to build a new factory. That idea obviously bothered some people – those that matter in the financial sense – resulting in Apple’s shares being adversely affected again.
But is the iPhone 5 really to blame for the Foxconn hiring freeze?
If you want things to be easy for your brain and don’t really feel like thinking much, then yeah, why not? It’s not really like the news affects you personally, does it? Then again, there are some factors that may be related to the Foxconn hiring freeze, factors worth looking at.
One, Foxconn has declared its intentions to rely more on automation early this year. Its CEO, Guo Taiming has said that their “goal is to see the first batch of fully automated factory in 5-10 years and to eliminate simple and repetitive processes through automation in the next few years.”
Even Foxconn employees have confirmed this, with statements like: “The robot project has been finalized, and the total investment is about 3 billion yuan.” (Source)
Two, blame the Chinese New Year. It may sound ridiculous, but according to Foxconn themselves, their employees have returned en masse to work more this year as compared to other years, after the Chinese New Year. The result? The company does not need to hire.
Three, Apple has been using more assemblers. This means less business for Foxconn as, for example, about 40% of iPad Minis are assembled by another entity.
Still think the slow iPhone 5 sales are to blame for the Foxconn hiring freeze? What about the news that the iPhone 5 was the best-selling phone in Q4 last year?
[Image via cuttinglet]