As per a new report by Financial Times, Apple is slowing down its production and reducing the staff intake. The demand for smartphones has plunged down due to the COVID-19 outbreak and this is having a direct impact on Apple’s supply chain.
Due to Coronavirus pandemic, many were critical of when Apple’s supply chain will return to normal and cater to iPhone 12 demands. A new report from Nikkei says that Foxconn, one of the largest iPhone manufacturer has finally managed to hire enough workers to meet ‘seasonal demand.’ The statement also implies that Foxconn seems to be finally recovering from the COVID-19 shutdown and picking pace.
The coronavirus epidemic has hit Apple’s production line. Foxconn is now trying to lure back its employees with incentives like bonuses, free meals, shuttles, and company provided accommodation.
In spite of the Wuhan Coronavirus outbreak in China, Foxconn has reportedly seen a “fairly small impact” on its production lines. However, it could face a big hit if the Chinese government forces factories to remain closed for another week.
Foxconn is one of the major manufacturing partners for the iPhone. The company has conducted an internal investigation into allegations of fraud. Apparently, Foxconn employees sold iPhones with defective parts.
Trade war between the U.S and China has alarmed tech giants. Starting from December this year, iPhones will attract 15% tariff duty. Apple has said that it will absorb the duty by reducing the cost of parts. However, the move might not be sustainable and in the end customers may have to bear the brunt. Amid tensions, other Asian countries including India are prepping themselves as an alternate manufacturing destination for iPhone.
Foxconn is reportedly hiring thousands of employee to gear up for the upcoming iPhone launch. Apple is scheduled to launch new iPhones next month and typically the demand is at a peak in the first few months of launch.
Foxconn’s CEO Terry Gou has announced that he will be stepping down from running the day-to-day operations of the company later this year. He is now looking to hand over the running of the company to younger management.
Foxconn is considering setting up an iPhone factory in Vietnam to avoid any issues due to the trade war between China and the United States. Apart from Vietnam, Foxconn is also considering Thailand as an option.