At around 10 am, Apple’s stock took a hit following the news that Foxconn, one of its main manufacturers, had frozen hiring across China until the end of March. AAPL dropped by 1.6%, and has fallen by 34% since its record high in September of last year. It appears the move by Foxconn had spooked investors, cautious that a freeze in hiring most likely pointed to a drop in production, possibly triggered by weaker demand for the iPhone.
It appears however, that investors can breathe easy. In a phone interview, Foxconn spokesman Bruce Liu has told Bloomberg that the freeze was put in place simply because more employees had returned to work following the break for the Chinese New Year, and that the decision was not related to the production of the iPhone 5, or indeed any of Apple’s products.
Following this more recent revelation, AAPL appears to have recovered. The iPhone 5 is predicted to sell around 38 million units in this quarter, 20% less than the previous quarter. Alexander Peterc (BNP Paribas) described the current buying trend as “a big slowdown”. Some analysts are still predicting the emergence of a low cost iPhone this year, however these rumors are to be treated with a little more scepticism.