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iPhone 5 demand prompts Foxconn recruitment drive in Henan

  • Staff Reporter
  • 2012-09-23
  • 16:45 (GMT+8)
Apple fans swarm an Apple Store in Hong Kong on Sept. 21, the official release date of the iPhone 5. (Photo/CNA)

Apple fans swarm an Apple Store in Hong Kong on Sept. 21, the official release date of the iPhone 5. (Photo/CNA)

Soaring demand for Apple's new iPhone 5 has prompted the Henan provincial government to assist contract manufacturer Foxconn in recruiting 50,000 new workers by the end of the month, reports the Commercial Times, our Chinese-language sister paper.

Taiwan-based Foxconn, the world's largest maker of electronic components, began receiving orders in August to manufacture the iPhone 5, which officially went on sale on Sept. 21 in nine countries and territories as part of the first wave of its release.

The longer, thinner and faster iPhone 5 reportedly received 2 million pre-orders, with some analysts predicting that Apple could sell up to 8 million units of the smartphone in the first weekend of its release alone.

One of the key Foxconn factories producing the iPhone 5 is located in Zhengzhou, capital of the central Chinese province of Henan. The factory currently has around 150,000 workers and a production capacity of 200,000 Apple smartphones a day.

To meet the influx of orders for the iPhone 5, the Zhengzhou factory will require an additional 200,000 workers, including an initial 50,000 before the end of the month, Commercial Times reported.

The provincial government is assisting Foxconn with the recruitment process, splitting the quota between the province's 18 cities. The city of Zhumadian has been tasked with finding 10,000 workers for Foxconn before the end of the year. Zhumadian has in turn delegated the task to its one district and nine counties, with each region's villages and towns required to recruit 20 to 30 workers.

To entice potential workers, the Henan government is also offering a subsidy of 200 yuan (US$32) per month for each new worker until the end of the year. This subsidy plan is likely to cost the Henan government in excess of 100 million yuan (US$15.8 million), Commercial Times said.

So far the recruitment campaign has struggled to gain traction. Zhumadian was asked to add 3,200 new Foxconn workers in August but only managed to fill half of the quota. Ningling county in the province's Shangqiu city has also found it difficult to locate workers, adding less than 100 new workers since Aug. 10 despite a quota of 700.

Meanwhile, Wall Street analysts are predicting that Apple shares, which closed at US$700.09 on Friday, will break through the US$900 barrier by the first quarter of 2013.

Wedbush analyst Scott Sutherland predicts that Apple stocks could hit US$885 by next March, while Topeka analyst Brian White offered the highest estimate of US$1,111, based on his forecast of Apple's gross profit margin for 2013 multiplied by 22 times the company's price-earnings ratio. Topeka also interviewed 100 iPhone 5 customers on Friday and discovered that half of them were upgrading from the previous version of the iPhone, the iPhone 4S, released only a year ago.

Piper Jaffray analyst Gene Munster estimated Apple's target share price at US$910.

On Friday, Apple also sought a ban of Samsung products ruled to have violated Apple patents in the US and sought an additional US$707 million in damages. The US company was awarded US$1.05 billion in damages in late August after a Californian court ruled that the South Korean company had copied key features of Apple products.

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