Details of just what went wrong are sketchy, as the source for this tale is an anonymous Foxconn staffer chatting to China Business. That report, after being forced through a couple of translation engines, suggests Apple sent back at least five million iPhones, and maybe as many as eight million, “due to appearance of substandard or dysfunctional problems.” Read more
Apple has updated its official China website homepage to offer its respect and sympathy following the disastrous earthquake that has affected the country over the past few days.
The acknowledgement present on Apple’s site reads as follows:
Our deepest condolences to those who were taken away by the Sichuan Yaan earthquake, and respect to all the rescuers. May those who have passed away rest in peace, and may the survivors stay strong.
The company has also offered a statement that pledges cash donations and new Apple devices to help schools that have been affected:
In this difficult time our hearts are with the Sichuan earthquake victims. In addition to cash donations to help the victims ride out the storm, we will also commit to donating brand new Apple equipment to some of the schools in the affected region, and the local Apple staff will be on standby to provide support.
Hon Hai Precision Industry Co, better known by its parent company name Foxconn, posted record quarterly profits in the final quarter of last year, citing increased production and improved efficiency of iPhones and iPads, as reported by Bloomberg.
Net income rose 5.6 percent to $1.2 billion, ahead of analyst expectations, but may face more challenging times ahead … Read more
Update: While it’s hard to read too much into these reports, Foxconn told The Wall Street Journal the freeze on hiring is a result of ”a high employee return rate following the Lunar New Year holiday.”
According to the report from Financial Times, Apple’s major assembly partner Foxconn has halted new hiring at its facilities due to a slow down in production for the iPhone 5:
The suspension in hiring by China’s largest private sector employer and the biggest assembler of Apple products, is the first such countrywide move since the 2009 downturn, prompted by the financial crisis. It underscores the weakening demand for some Apple products, which has put pressure on the US company’s battered share price.
Foxconn confirmed it is not currently hiring in its plants located in mainland China, and FT reported the company’s employees were informed that hiring would stop until at least the end of March “in response to reduced orders for the iPhone 5.” While the iPhone 5 doesn’t seem to be experiencing a slow down, according to the latest numbers from Strategy Analytics, the March time frame would line up nicely with rumors of iPhone 5S production beginning in March. Many analysts are calling for a June or July launch of the next-generation iPhone, and Apple could begin initial production as early as next month if true. The decreased production at Foxconn is likely thanks to the expected falloff in new sales in the months following the busy holiday season. Less likely is speculation that Apple could be switching manufacturers.
Recruiters in China told FT that Foxconn has stopped hiring specifically for the iPhone and iPad production lines in many of its factories:
In January 2012, The New York Times published a lengthy report covering the problems with Foxconn’s plants in China. The piece caused uproar, and it pushed Apple to perform its own audit in the factories that make its products and work to address the issues the audit found. Close to a year after publishing its first report, the New York Times has followed up with a second piece that found working conditions are getting better. One of the first steps was in March, when top Apple executives met with Foxconn executives to reduce worker hours and increase wages in 2013. This is said to create a ripple effect that will benefit the entire manufacturing industry.
Past wages and hours, changes are also coming about within the plant. According to the New York Times, new safety measures like automatic shut-off devices and protective foam are now in place to protect workers when doing their difficult jobs of assembling various Apple products. The piece told a story of one worker receiving a wooden, sturdy chair more comfortable on her back than the green plastic stool she once used. Apple also tripled the staff at its California headquarters to ensure safe working conditions across the world.
The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.
Earlier this year, CEO Tim Cook spoke a lot about worker safety while changes were underway. “We insist that our manufacturing partners follow Apple’s strict code of conduct, and to make sure they do, the Supplier Responsibility team led more than 200 audits at facilities throughout our supply chain last year,” said Cook in an email. “These audits make sure that working conditions are safe and just, and if a manufacturer won’t live up to our standards, we stop working with them.” Subsequently, Apple issued a statement to the New York Times this week on the recent changes: