Foxconn unrest risks iPhone shipments, weighs on Apple shares - Reuters

TAIPEI, Nov 25 (Reuters) - Foxconn's (2317.TW) flagship iPhone works successful China is acceptable to spot a further simplification successful November shipments aft the latest bout of idiosyncratic unrest this week, a root with nonstop cognition of the substance said connected Friday, arsenic thousands of employees quit.

The world's largest Apple (AAPL.O) iPhone mill has been grappling with strict COVID-19 restrictions that person fuelled discontent among workers and disrupted accumulation up of Christmas and January's Lunar New Year holiday, arsenic galore workers were either enactment into isolation oregon fled the plant.

Following Wednesday's escalation that saw workers clash with information personnel, Foxconn could present spot much than 30% of the site's November accumulation affected, up from an interior estimation of up to 30% erstwhile the labour issues erupted successful precocious October, the root said.

The mill is the lone 1 that makes premium iPhone models, including the iPhone 14 Pro, and the root said it is improbable to resume afloat accumulation by the extremity of this month.

Foxconn, formally known arsenic Hon Hai Precision Industry Co, declined to comment. Apple, which said connected Thursday it had unit astatine the factory, did not respond to a petition for remark connected Friday.

"The idiosyncratic unrest astatine Foxconn's works successful China could measurement connected Apple's November iPhone shipments," Victoria Scholar, caput of concern astatine Interactive Investor said, arsenic concerns turn implicit Apple's quality to present products for the engaged vacation period.

Apple shares were down 1.9% successful precocious greeting commercialized connected Friday, portion the benchmark Nasdaq scale was down 0.3%.

"Apple is inactive viewed arsenic 1 of the much resilient stocks successful the tech sector... However, Apple continues to clasp disconnected from providing authoritative guidance fixed the macroeconomic uncertainty," Scholar added.

U.S. Best Buy Co Inc (BBY.N) said connected Tuesday it expected high-end iPhones to beryllium successful abbreviated supply astatine stores this vacation season. Analysts said iPhones astatine Apple stores successful the United States during the Black Friday buying play were besides down from a twelvemonth earlier, and it was taking longer to replenish stocks, Reuters reported this week.

LOWER SHIPMENTS

KGI Securities expert Christine Wang said if the existent contented lasts done December, astir 10 cardinal units of iPhone accumulation volition beryllium lost, which translates to 12% little iPhone shipment successful the past 4th of 2022.

Wedbush Securities estimates galore Apple stores present person 25% to 30% less iPhone 14 Pros than mean heading into the vacation buying season.

In a connection connected Nov. 7, Apple said it expected little iPhone 14 Pro and iPhone 14 Pro Max shipments than antecedently anticipated.

Some caller recruits hired successful caller weeks by Foxconn claimed they were misled implicit compensation benefits astatine the factory, and others complained astir sharing dormitories with colleagues who had tested affirmative for COVID.

Foxconn connected Thursday apologised for a pay-related "technical error" erstwhile hiring and aboriginal offered 10,000 yuan ($1,400) to protesting caller recruits who agreed to resign and leave.

The root said much than 20,000 workers, mostly caller hires not yet moving connected accumulation lines, took the wealth and left. Videos posted connected Chinese societal media connected Friday showed crowds and agelong lines of luggage-laden workers queuing for buses.

"It's clip to spell home," 1 idiosyncratic posted.

The plant, earlier its troubles began, employed much than 200,000 staff. It has dormitories, restaurants, hoops courts and a shot transportation crossed its sprawling astir 1.4 million-square-metre (15 million-square-foot) facility.

Another Foxconn root acquainted with the substance said immoderate caller hires had near the field but did not elaborate connected however many. This idiosyncratic said that due to the fact that the radical leaving had not yet been trained oregon begun to work, their departures would not origin further harm to existent production.

"The incidental has a large interaction connected our nationalist representation but small connected our (current) capacity. Our existent capableness is not affected," the root said.

"There's lone truthful overmuch firm tin bash connected pandemic prevention ... It's been a occupation for a while. This is simply a occupation faced by everyone," the idiosyncratic said, pointing to different idiosyncratic unrest triggered by rigid COVID restrictions, including upheaval astatine different Apple supplier, Quanta (2382.TW), successful May.

Foxconn shares closed down 0.5%, lagging the broader market, (.TWII) which ended flat.

($1 = 7.1616 Chinese yuan renminbi)

Reporting By Yimou Lee; Additional reporting by Brenda Goh and Johann M Cherian, Tiyashi Datta and Aditya Soni successful Bengaluru; Editing by William Mallard, Gerry Doyle, Elaine Hardcastle

Our Standards: The Thomson Reuters Trust Principles.