The company which assembles most of Apple’s Macs and iOS devices, along with those of most other large electronics companies has suspended recruitment, according to the Financial Times (subscription required).
In a story on its website, the FT said ‘Foxconn, the world’s largest contract electronics manufacturer, has imposed a recruitment freeze across most of its factories in China as it slows production of Apple’s iPhone 5.’
It added that the recruitment freeze ‘underscores the weakening demand for some Apple products.’ That weakening demand will come as a surprise to anyone who has tried to order any of several Apple products which are currently in short supply.
While sales of the iPhone 5 and iPad were lower than analysts had expected in the run up to Christmas, much of that was due to Apple’s inability to supply, rather than a weakening in demand.
Several other explanations for the recruitment freeze have been put forward by analysts and commentators. These include a fall in sales at HP, a shift to greater automated production at Foxconn, and a shift by Apple from Foxconn to other producers.
One other explanation, proposed by Philip Elmer-Dewitt at Fortune is that far more workers returned to Foxconn after the Chinese New Year than is usually the case.
Historically, according to Daryanani, 20%-30% of Chinese workers don’t bother to come back after the holidays to factory jobs where the pay is low and working conditions harsh. This year, according to his sources, return rates may have been closer to 90%.
Could that have anything to do with the fact that Foxconn, pressured by Apple and local workers rights groups, has more than doubled wages and cut overtime hours?
That seems at least as plausible as a ‘weakening in demand’ for Apple products.