Boston, MA 02/21/2013 (wallstreetpr) – Apple Inc (NASDAQ:AAPL) gets a large number of mobile devices including iPhones and iPads manufactured by the Chinese company Foxconn Technology Group. The latter put a cork on hiring and coincidentally also stalled its plans of expanding production capacity for iPhone assembly at its Zehgzhou plant in China. This has led to widespread speculation about the demand for Apple products specifically iPhones. The smartphone market has plateaued with the entry of a number of cheaper and more viable handset options. Samsung’s Android OS based phones have made a dent in the smartphone market and Apple is facing the heat.
IPhone sales taking a hit
Apple Inc (NASDAQ:AAPL) is slated to sell 38 million iPhone 5 handsets this quarter which is 20 percent lower than the previous quarter. Though Foxconn had initially indicated that the hiring freeze is due to reduced business from Apple, it was later attributed it to an influx of workers returning from the Chinese New Year break. Some market watchers are also indicating to the fact that the stop on hiring is due to reduction in the Hewlett-Packard Company (NYSE:HPQ), personal computer orders. An emailed statement by an HP spokesperson stated that since the computer company follows a diversified supplier strategy it does not necessarily indicate a loss of demand for their products.
Around 33 percent of Foxconn revenues come from Apple Inc (NASDAQ:AAPL) while 8.1 percent come from Hewlett-Packard Company (NYSE:HPQ), these two being its biggest customers. Apple Inc (NASDAQ:AAPL) CEO Tim Cook has sent out a clear message to investors about the fact that since the company’s supply chain works on very complex mechanics, too much should not be read into any data point despite it being backed by facts.
Shares of Apple Inc (NASDAQ:AAPL) were down by 2.42 % to close at $448.85.
Shares of Hewlett-Packard Company (NYSE:HPQ) were down by 1.12% to close at $16.70.
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