NO IPHONE FOR YOU!

Foxconn riots could affect supplies of iPhone 5, says analyst

Obsession
China Slowdown
Obsession
China Slowdown
Two Foxconn photos
Purported scenes from the riot at China’s Foxconn factory posted by Sina Weibo user Li Tian (and since removed from the site)

Hope you got your iPhone 5 already, because a shutdown of Foxconn’s Taiyuan plant, where 2,000 workers rioted Sunday night, could make them that little bit harder to get hold of.

“I can say that the Taiyuan plant does assemble iPhones and the riots could affect supply in a limited manner in about a week or so,” says IDC analyst Michael Palma. The plant employs some 79,000 people, but according to figures from March, Foxconn had 1.2 million employees across China.

Just how “limited” will of course depend on what Foxconn can do to fill the breach. Palma says the company has been “improving efficiency [in a way] that should help with manufacturing yield, ultimately benefitting supply.” And, he adds, “for the latest phone, there appears to be a reversion to a more efficient manufacturing process used in the iPhone 3 that should also help with supply.” Longer term, Apple has also been diversifying beyond its sole reliance on Foxconn, having reportedly brought on board a second Taiwanese manufacturer, Pegatron, to handle manufacture of the iPad mini.

The other question, of course, is whether there are more such “riots”. “My instinct on this is that it is just a dorm fight,” says Al Hilwa, also an analyst at IDC. “A good reason why most companies in the West don’t house their employees. Hard to believe it will have a lasting effect unless it takes a life of its own as a symbolic gesture standing for something else altogether different.”

Good thing labor unrest in China is rare. Oh, wait…

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