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Key Apple Supplier Halts Hiring Due To Poor iPhone Sales
Two months ago, Tim Cook reportedly wrote Jim Cramer that everything was awesome with iPhone sales in China. Days later, channel checks appeared to call Cook's statement into question. Several day ago, one of Apple's component makers - Dialog Semi - issued cautious guidance strongly suggesting iPhone sales momentum was weakening. Apple's earnings produced disappointment as China sales rather notably fell (but was quickly dismissed by analysts as US sales rose) and now, perhaps most worrying of all, Taiwan’s Pegatron Corp - maker of Apple's next-gen iPhone 6S and iPad - has halted hiring in its Shanghai factory as workers note "sales of iPhone 6S have been disappointing."
In May 2013, Pegatron became "the new FoxConn" as then new Chief Executive Tim Cook, Apple divided its weight more equally with a relatively unknown supplier, giving the technology giant a greater supply-chain balance.
Pegatron Corp., named after the flying horse Pegasus, will be the primary assembler of a low-cost iPhone expected to be offered later this year. Foxconn's smaller rival across town became a minor producer of iPhones in 2011 and began making iPad Mini tablet computers last year.
Back in June 2014, everything was awesome:
Two companies that assemble Apple’s iPhones and iPads are on a hiring spree, a signal that orders from the Cupertino-based group are ramping up ahead of the launch of a new device.
not so much
Taiwan’s Pegatron Corp, which employs 100,000 people, said on Monday that it is expanding its workforce in mainland China by 30 per cent to keep up with the production of smartphones.
But now, in October 2015, the huge facility at Pegatron Technology's factory in Shanghai sports a deserted look, as China Daily reported moments ago.
Gone are crowds waiting for job interviews or others who come to enquire about possible job openings.
The facility, which at its peak employed around 100,000 people, has temporarily suspended hiring as demand for Apple products has waned considerably.
The winding passage that leads to an interview room is all but deserted. Rather than excited faces, one can see young employees trudging out of the facility with fatigue and despair written large on their face.
Zhang Libing, a 23-year-old from Anhui province, told China Daily that he had just resigned from his job at Pegatron as he was exhausted and fatigued with the long working hours. Next to him was a huge electronic screen that kept flashing the message that the company has put on hold all fresh hiring for the time being.
"We are not surprised at that," Zhang said. "The sales of iPhone 6S have been disappointing. I am afraid that if we do not leave now, we will be laid off soon."
...
China, its biggest market outside the United States, accounted for nearly one-fourth of its total revenues in the fourth fiscal quarter because of its robust handset sales in the country. But fresh concerns have arisen over whether the company would be able to sustain the sales momentum.
Fading enthusiasm for iPhones in China has dragged down the device prices in the parallel market and hit new orders to the supply chain partners.
Pegatron was planning to hire roughly 40,000 workers for its Shanghai plants in the summer when Apple entrusted it with the iPhone 6S and iPad manufacturing. The current employee strength of the company remained unclear.
It appears things have changed dramatically in a very short period of time...
Cai Xiaoshuai left his hometown in Luoyang of Henan province and landed a job at the assembly line in Pegatron four months ago. But the 22-year-old man said he had had enough. His basic wage was 2,020 yuan ($320) per month and he had to work overtime for 2.5 hours every day to make sure that his salary would get close to 4,000 yuan.
"Some of my friends went to Kunshan in Jiangsu province to try their luck there. But it seems that the electronics industry there is in an even worse shape. So I am thinking of staying on and checking out other opportunities in Shanghai. But I will definitely not work in any electronics company. I have had enough," said Cai.
Which leaves us asking, as we did when doubts began to surface about Cook's letter to Cramer:
So is AAPL the next AOL, and is Tim Cook the next Thorsten Heins?
It all depends on China: if the world's most populous nation can get its stock market, its economy and its currency under control, then this too shall pass. The problem is that if, as many increasingly suggest, China has lost control of all three. At that point anyone who thought they got a great deal when buying AAPL at $92 will have far better opportunities to dollar-cost average far, far lower.
Oh, and to anyone still holding their breath for AAPL to file a public statement which may well contain an outright lie, you may exhale now.
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In fairness to Tim Cook, like most homosexual men, he does spend a lot of time and energy looking to get his cock sucked.
Heterosexuals should be forced to sit in a corner and stare at the walls for a few hours a day to level the playing field. There's only 24 hours in a day and when you're spending 4 of them on Grindr, it makes it a little tougher to get real work done.
China...Fictional Fairytale Vs. Factual Truths
China is economically doomed but do they hold the ultimate trump card in 10k+ tons of gold???
The pivot by BRICS, OPEC, etc. turning away from US Treasury's to initiate and maintain ongoing physical gold purchases coincided with a simultaneous and ongoing collapse in the price of gold (gold's price peaked in July '11 and has fallen by a third since?!?). Suffice to say, when the price of something collapses on ongoing record (physical) demand and the price of something else rises on a collapse in demand...these are not typical free market responses. When the largest and most fundamental markets act contrary to supply and demand...when the cornerstones of a market are seemingly removed...the validity of the market signals in general are clearly up for debate?!?
http://econimica.blogspot.com/2015/11/chinafictional-fairytale-vs-factual.html
China has an internal debt upwards of 30 TRILLION dollars. That money has gone into their own infrastructure the past couple decades to pay for the rapid urbanization of China. Look up ghost cities in China.
10,000 tonnes of gold? That's PEANUTS. 10k tonnes is only 365 billion dollars. And tell us, what happens to gold prices if they try and SELL some of their stash?
Finally, they don't have 10k tonnes. Maybe a thousand above their official tally of 1,600, but nowhere near 10,000.
10,000 tonnes of gold? That's PEANUTS...
Which means the USA's 8133 tonnes is ? To be "fair", the 8133 figure is the official measure and the highest of all nations on the earth, but as to your comment, how would you describe the US' holdings in relation to an 18T frn debt with the principle growing at ~1.5T frn per year? We're adding our entire Au value to our debt every 90 days according to your calculations.
Thank goodness for futures contracts!
jmo.
Dont worry the Media will make it seem like Apple is booming and get the Pension funds to buy more stock till the trap door collapses.
Obama will suk Cook, Obama is a life time member of Man's country Chicago
I heard that is what they got on him and why he does what THEY tell them to do.
Frequented bath houses in his younger days. Now he has Air Force one to fly around to his gay meetings.
Hey TYLER!!! TYLER!! TYLER!!
You forgot this on your timeline from February 2013, BACK WHEN APPLE WAs AROUND $62. LIKE 125% AGO.
"FOXCONN FREEZES HIRING IPHONE PRODUCTION SLOWDOWN...."
http://www.zerohedge.com/news/2013-02-20/foxconn-freezes-hiring-iphone-p...
"In fairness to Tim Cook, like most homosexual men, he does spend a lot of time and energy looking to get his cock sucked."
Maybe he has to spend a lot of time and energy because there aren't many gay men who want to suck an older man with a limp micro penis--unless they are getting paid well?
At apple you gotta work from the BOTTOM up.
Not only that but gays have to spend at least one hour per day making comments on news articles pointing out how bad gays have been treated in the past.
One hour denying God and trying to convert others to their #dark-matter-matters religion.
Sodomy is not love, it's a vice and an evil. It's one of the 4 major sins that cries to God for vengeance.
(Anyone wanna name the other 3?)
Defrauding workers of a just wage.
Oppression of the poor
Murder
We live in a country eyeball deep in all of them. How long will God stay His hand from vengeance?
the 3 kardasen sisters...? they all love anal...?
Tim Cook strikes me as a nelly princess. I suspect he'd much rather take cock up his ass than getting his own cock sucked.
Uh-oh!
https://www.youtube.com/watch?v=Ec-8A5k16Ak
Obamacare premiums strike again!
Oh yeah, and: rent, electricity, natural gas, groceries, other insurance premiums, taxes, lack of income, layoffs...
Apple needs to stir up their consumer zombies with lower monthly payments. kind of like subprime auto buyers.
make the payments extremely low and stretch it out years.
iPoops... they are at the 6th generation. Cost and material "optimization" has made a slimmer, more brittle phone over the years, and after about two generations of iterative fleecing later (the iPhone 4 generation was the peak of iPoops), the customers may be finally starting to wake up to the idea that "hey, it's the same fucking clownshit that they sold last year."
So they've teamed up with service providers to offer things like "your iPhone is free forever - just keep trading it in so long as you pay your phone bill", etc. They do have to show sales somehow.
Wait till the iPoop 7 comes out with one extra bell and half a whistle...
The Clownasssniffers that stand in line for this shitphone will become increasingly laughed at until the final I phone12 has just one last sniffer in line when it goes on sale....then and only then will the CNBS pumpers stop pumping this dead company
It's not over until Cook says 'iShit the bed'.
I hate Apple with a passion for many reasons, and their gayass takeover and shitting all over my childhood hometown of Cupertino, CA fuels the fire a millionfold.
During the course of my electronics engineering job, I grew accustomed to using a Macbook as my primary computer. The 2012 model is a pretty decent piece of hardware, and Parallels is an excellent productivity booster for those who need to work across multiple Windows and Linux environments. Shit just works.
Under the impression that Apple still makes "shit just works" products, I purchased an iPad Mini for my grandparents, so they can "Facetime" their kids and grandkids. I've been trying to make this shit work all morning, trying to make "facetime" work between my Macbook and the iPoop. It does not work, no matter what I try. I've had much better experiences making dissimilar *nix systems come together. What a waste of time...
.... did ya reset it?
I share your passion.
Cell phone companies in the US and Canada have been backing away from subsidizing phones for the past couple years. It's now going to up to the phone companies themselves to subsidize their own phones if they want, which for Apple, means lower profits.
Replica iphones are doing pretty good in China actually. Maybe Apple should produce a replica of its own iCrap, that would boost sales for a while...
mark my words there will be billions to made shorting AAPL at the right time
my personal projections are sometime between now and next earnings - the only trick in their arsenal to bring back sales - a larger screen - has been played. watch the chinese phone producers make massive inroads into western markets in the next 12-24 months and subsequently watch AAPLs margins get wrecked.
The monthly chart sucks ass.
I think the powers that be are levitating AAPL and SPY. They are all that matters along with the crony zio companies that also get held up like Facebook, AMZN, GOOG and a few others.
The levitation will continue until the end of Obola's term. They have so much invested in AA obola.
And...the high-freq algo's go insane in a milisecond, with Android users from the Hamptons to the Bahamas doing battle with the i-phone users in Bali and Fort Lauderdale via their brokers.
Quite a spectacle, place your bets ;-)
Sheep get sheared...and when there is no wool left they get slaughtered. Welcome to THEIR market (aka casino).
Every company that relies on sales of luxury goods to Mainland Chinese now has a problem.
I say this not based on reports from factories or emails from Tim Cook, but observations of luxury brand stores in Hong Kong where 80% of Mainland luxury purchases previous;ly took place.
Uoscale hotel occupation and retail traffic is way down and room rates and rents are being hammered.
Macau Casinos are the new ghost towns.
This is all the primary data one needs to know.
i agree with your synposis
although my question is how much of this is related to the graft crackdown (no one wants to be seen flaunting wealth, anyone can be in the party's crosshairs) or is it more related fundamental reasons?
There are three factors causing this:
1. Anti-corruption crack down and anti-money laundering in PRC (big impact on high roller traffic).
2. HKD pegged to USD so HK is relatively expensive compared to other global cities.
3. Flattening Mainland economy.
I do not think the appetite for high-end phones is satiated. Young Chinese now look at their phones as the most important marker of "face" to the exclusion of traditional items like watches. However, many Mainland Chinese are now learning the meaning of frugality.
Hopefully that f**k Adelson will go broke. We can all hope. He likes funding NeoCons and pretending he was not for Obola.
Whoever is a fan of Adelson here is quite frankly too stupid to live ..
https://youtu.be/jE2_qmlKFVU
They will masturbate to their lies until the pitchforks are outside the castle walls.
wow
Sheldon Adleson must crying in his Matzah ball soup right now.
The guy making the iphone would have to use two months wages to buy an iphone. I think that might be the issue.
Maybe Tim Cook can shove an iPhoney 7 up his ass like that Christopher Walken character in Pulp Fiction.
https://www.youtube.com/watch?v=YFtHjV4c4uw
Yea, the only problem Freddie is Mr Cook would like to have another I-phone shoved up his ass. Tim takes "butt dialing" someone to the next level. Don't even ask about Timmy testing the new IPad's.....
Maybe he can come up with an iArouse for his buddies for more sales.
you mean YOUVE already tried it?!
It has a camera. Call it a medical device and sell it to Obamacare with an appropriate medical equipment markup.
I like iPhones. Get off the hate bandwagen. This is a bull shit article.
You're missing the point bub. This is about a one trick pony who's been doing his dance for a lot longer than most thought starting to get split hooves. It's astounding they've been able to take a commoditized product and still rack up the kind of revenue and margins thus far, but every good tale must come to its end and unless there's some gotta have it over the horizon this puppy has only one direction to go.
Your description sounds like The Emperor's New Clothes. Eventually the sheeple wake up.
That said, the iPhone is a good piece of hardware (I'd never buy one), it's just way overpriced and too proprietary.
But reality is that Apple is desperate for "the next big thing". They haven't had a hit for almost 6 years, and that was the ipad. They tried the iwatch, and now, barely 6 months later, that iflop went from being sold at exclusive apple boutiques, to being hawked at Best Buy.
LOL, Haters. So typical. Apple makes a fine device. They market well. It's called capitalism. Something you freaks usually support.
I'm a hater? I guess fanboys are so dumb they can't read.
In the iTard's mind, anybody that dares to question Chairman Timmah is a hater.
Kind of like when the larger iphones started bending for no good reason -- apple announced that they had verified only 7 phones had bent out of the millions sold, so bending was decreed to be a non-issue and the iTards accepted that as fact. But with the recent announcement of the 6S, they changed the case to the stronger 7000-series aluminum while never admitting there still is an actual bending problem with the older model.
Newsflash to the iTards -- apple lies to you regularly and if you still choose to support them, you truly are not thinking different, or at all.
Every fuckwit that gets scammed comes out with the same shit.
Denial and then excuses even supporting the scamming fuckers if it makes their ludicrous decision look remotely plausible.
You bought fucking cheap jack shit made in a Chinese sweat shop of inferior quality and paid 5 times more than than far better phones made in other Chinese sweat shops.
By a crony corrupt organization run by a cock squatting financial engineer who knows how to tickle his fan boys
Moron
Actually very true, only way is down, the only thing thats kept Apple going is the consumers "have to have" attitude - Androids can do more, better, and so can Windowsphone, especially the new Microsoft modelss about to come out.
Android and Microsoft will make sure Iphone sales remain strong.
cost under $200, sold ya for up to $1000...
I wish at least you got a 4GB memory.....
Get a girlfriend, dickweed.
most anti apple types still live in moms basement playing D&D and usually have to be REGISTERED-if you kow what i mean....lol!
Every fuckwit that gets scammed comes out with the same shit.
Denial and then excuses even supporting the scamming fuckers if it makes their ludicrous decision look remotely plausible.
You bought fucking cheap jack shit made in a Chinese sweat shop of inferior quality and paid 5 times more than than far better phones made in other Chinese sweat shops.
By a crony corrupt organization run by a cock squatting financial engineer who knows how to tickle his fan boys
Moron
"I like iphones"---what a douche
you cannot "like" a Iphone........you have to love it and have oral intercourse with it in public
What the report is missing is the fact that a good deal of work that was once done by people is now being transfered to almost 100% robotic assembly. A number of companies in China have already made partial transitions and have downsized by cutting out 80-90% of their employees. They are amazed at the increase in productivity and also the quality of the products coming off their lines.
With that new revolution comes the fact that it no longer pays to assemble outside the end market because of the shipping costs. So there is a movement back to the US for a lot of products but with those getting the jobs only engineers and techs.
So those 1.2 million Chinese who used to assemble I phones will eventually be 50,000 engineers and techs who can design, build, program, and keep the machinery running.
Good luck to all the communications majors, psychology majors, and poly sci majors who paid $100K plus to get their degrees and who elected Obama Bin Laden the traitor to office. Enjoy the part time work at Walmart and Starbucks.
There is a much brighter future ahead for everyone but not with the greedy crooks who run and game the system today. If we took NASA public and raised the monies to expand our economies to space there would be unlimited room for expansion and prosperty for a lot more people.... but like Fanny. Freddie and other examples that too would be corrupted and bought off so the Hilaries and Pelosi's can become worth 10's of millions by running charities and consulting on how to game the current system.
"What the report is missing is the fact that a good deal of work that was once done by people is now being transferred to almost 100% robotic assembly. A number of companies in China have already made partial transitions and have downsized by cutting out 80-90% of their employees."
So why did the ChiComs end the one child policy if more workers aren't needed?
Maybe cannon fodder for an upcoming war?
They might not need the workers today, but they are looking 20 to 50 years from now
Their fertility rate is 1.7. A fertility rate of around 2.1 is needed jsut to maintain the population.
This means that their population will begin shrinking. They have a HUGE spike of population that's around 45 to 55 years old, and there won't be anyone to replace them as they retire, or to look after them as they age.
They still need the humanoids to make the calls
The fully automated society. The dream that never dies. With endless energy to run it. Godspeed.
No worries. Apple is still selling those iWatches by the iAssload. The things can even take your heartrate and tweet it. Who among us doesn't want to tweet his heartrate all day???
No worries. The Fed will use unaudited electronic money and buy Apple stock. The Fed's artificial put on the stock market is very real.
Maybe Apple stock will go up some more.
All smartphone sales are dropping like flies lol!!!!!! exept for the BB (a dig at Carl D-who will buy their stock when it hits -$500/share.-and tell others to do so also)
Abso-fucking-loutely incredible to me that markets and entire economies hinge on the sales of a damn smartphone.
Really? Shit gettin' crazy up in here!
Welcome to the real world motherfucker. Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn't.
My college son has had his I Phone 6S for a few weeks. He if very careful, has it in a good protective case but tells me it is falling apart. Quality is not there like it used to be.
Market saturation, who could have thunk?
Apple is a mirage, like Nike. They flood inventory into stores to make it look like they are selling insane numbers. Really they are just channel stuffing millions of units that will never sell.
Nike represents 80% of the shelf space at most shoe stores. It goes to say that you should see Nike shoes on the majority of people walking around. Well outside the ghetto, I don't see them at all.
In all fairness to Apple, at least I see people with their phones. Mostly iPhone 4s.
Xiaomi is decimating Apple in China. If you haven't seen the Xiaomi TV, check it out. They have a 4k TV that matches the picture quality of the Samsung SUHD for $640. It uses the same panel and has an upgradeable smart platform.
Must be why Vizio is going for an IPO now. If Xiaomi breaks into the US market Vizio can kiss their ass goodbye.
I saw comments (before) that china can't make good products.
Well.. shitheads, where do you think your iDIOT gadgets coming froms..??
Zhang Libing seems pretty smart. Quit your job while you still have a chance of finding a new job.
Why doesn't the US govermnet just buy the iphones and keep the cycle going?
I suggest it may be something different. The 5's and 6 came out rather close together. Most people in the U.S, who are cash poor have to sign up for two year cell plans for a new phone. There's not enough extra in the 6 vs 5 or the home budget to upgrade. I already have a 5 and a 6, one personal and one company.
I think phone sales are a zero sum game as virtually everyone in the world has one. Any new one has to replace the old one and be worth the extra.
I am not sure this is a good economic marker of any sort. However, there are plenty of others out there.
You have 5 and 6, gz you:)
Apple phone in hand of person is s exactle same as huge sign pointing an idiot. Person without free mind, person who was bainwashed to buy useless crap for lots of money :)
Bit like buying more stocks atm :)
Sell your gold asap and buy more iphone stocks, it must be worth something.
Wheter you like it or not apple is going down, as soon as more ppl realizes it is crap for idiots.
you don't know anything about fg so stfu. i don't like aapl either but i don't mock someone unless i know for a fact they really can't afford it. for all you know fg could have 1000X moar money than you.
Based on your superb writing I must assume you have a couple dozen iPhones.
Appleis going to ship the new iPhone 7 Commander soon. It has an app that works diectly with the FED to print money out of the back of the phone. Ben Franklins will just zoom right out.
the law of business:
a homosexual cannot possibly run an honest business..homo's are living a lie, ignoring biology of themselves - our best example is the bisexual in the white house - any care to defend his honesty? no I thought not.
homo's make very good elite as they hate not only themselves but anyone normal.
Can't wait until the scam of channel stuffing by crapple gets exposed finally.
Oh, you didn't know about that,
Seems crapplle stock is now so deeply embedded in Insurance company's portfolios it would fuck them over if crapple dropped like the real turd it truly is.
So they invented a new form of channel stuffing. Lining the bottom of the South China Sea with containers that fall of ships in a storm at a ratio of three to one to other kinds of goods.
Happily a Vietnamese fishing boat found one that hadn't sunk and they selling the things in Hanoi.
The insurance companies always pay up as it keeps them from going down and funnily enough it gets booked as sales.
Rumour has it that the faggot in chief is cooking and concocting a devilish plan with Maersk to load a new super container ship with 18376, containers of crapple watches and sink it, thereby boosting sales by several million percent in time fo Xmas and getting Maersk out of jam of too many fucking white elephants.
Wasn't their some old saw about two crooks and brothel or was about it two cooks and a broth.
Anyway checkit out in the shipping claims register
Infinite Growth Syndrome
What happens when everybody in the World that want's an iPhone has an iPhone ?. To counter that you build in obsolescence forcing people to constantly update, once people realize this, they will ditch the phone.
I wish this was true. Sadly, most people are so hooked into instant gratification and the concept of getting the 'latest and greatest' when it comes to iCrap.....that they will happily accept the planned obsolesence (they likely already realize this is a feature, not a bug, so to speak). They will dutifully stand in line at Bestest Buy and sign up for another 24 month pay-plan in order to pay $1,000 for a $25 piece of proprietary crap. Verizon Edge FTMFW, baby!
Doesnt the Obama regime give out free phones to his voters? Maybe in 2016 the new phones will be the iPhone6S. With an Obama / Hillary app telling the receivers to be sure to vote for those who provided the free phones.
Maybe its just me, but with each new photo of the guy, Tim Cook looks creepier and creepier.
Tim Cook is from Mobile, AL whereas Steve Jobs was part-Syrian
Sadly, Steve Jobs would be three Useful Big Ideas beyond this by now.
Sweet Jesus. I'm used to seeing horribly speculative articles on zh. I really am. But this one is some fucking poorly sourced shit. So "Zhang" 23, just quit his job because he was working long hours and OT but says in the same breathe sales are waning. Wait what? If sales are waning why are you working incredibly long hours AND OT? One of those statements is false and I don't doubt the hours he was working. This article is so full of shit. Seriously for fucks sakes I'm starting to question the validity of most of the shit posted here.
Apple just had another record breaking quarter. Fuck you you apple hating monkeys. No really just fuck off!
mr x just a thought: working long hours might be the sign of a failing business - been there done that. so your post is infantile.
And your post was filled with useless factless diatribe. But thanks for your unwanted, useless opinion.
Zerohedge has been so fucking wrong about Apple. At this point if they get it right it will be a broken clock is right twice a day. If your wrong by several years and several hundred percent of upside you are fucking wrong. Just like Reggie Middleton was wrong when posting on here ad naseum about margin compression.
It's just sad because ZH posts some great stuff and I love it. But damn they look like fools when it comes to Apple.
Three things:
Steve Jobs is still dead.
Verizon just announced layoffs, though they declined to mention how many (meaning: a whole fucking lot).
Tim Cook sucks. Not just cock, but everything. A total poser.
Bonus: Global Sytemic Economic Collapse™ is imminent, though the Fed will still not allow it. Timing is such a bitch.