“Foxconn, assembler of most of Apple Inc’s latest iPhones, will cut working hours over the week-long Lunar New Year holiday, a person familiar with the matter said, in a rare move that analysts interpreted as a sign of softening demand,” J.R. Wu reports for Reuters.
“Reports of slowing shipments and mounting inventories of the iPhone 6S and 6S Plus, as well as tepid forecasts from suppliers, have pushed Apple investors into unfamiliar territory after years of booming sales and surging shares,” Wu reports. “‘Chinese New Year is a big holiday and there is usually overtime for workers. But this year Foxconn will have a normal break,’ the person said, referring to the Lunar New Year which falls on Feb. 8.”
“The first quarter is usually a quieter time for suppliers and the most obvious period to cut production, adjusting for extra supply brought on for the holiday season at the end of the calendar year,” Wu reports. “[Some] analysts questioned the extent of any slowdown. ‘Apple has been gaining significant market share in pretty much every region, and I’m not seeing a global slowdown,’ said analyst Patrick Moorhead at Moor Insights & Strategy. Nevertheless, many are bracing for a production cut. Since early December, about a third of analysts tracked by Thomson Reuters have trimmed estimates on Apple.”
Read more in the full article here.
MacDailyNews Take: In other words: Production has been reduced during the most obvious time to reduce production and, even though Apple’s iPhone has been gaining significant market share in pretty much every region, ignore that and instead, based upon one anonymous source who says Foxconn is only having their usual New Year’s holiday and not working overtime this year, panic and sell.
Makes a lot of sense, huh?
Assembly of “S” model iPhones is easier than non-“S” model iPhones by design. Foxconn could simply have had an easier 4th quarter and made the number of units Apple ordered this year, whereas last year was the first year for “6” model iPhones and therefore Foxconn had a much steeper learning curve.
But, of course, that logical interpretation wouldn’t cause share prices to decline.
Use these transparent manipulations to your advantage.