Improvements To Foxconn Working Conditions = Fewer iPads For Apple


With worker overtime now reduced, Foxconn simply can't assemble as many iPads as it used to.
With worker overtime now reduced, Foxconn simply can't assemble as many iPads as it used to.

Apple’s new iPad is still selling like hot cakes, and new customers continue to face a 1-2-week shipping delay when purchasing through the Apple online store. But the company is reportedly struggling to meet demand with production constrained by Retina display supply and the recent cuts to factory worker overtime at Foxconn.

Analyst Shaw Wu from Sterne Agee has dismissed claims that demand for the new iPad is diminishing, and his sources within Apple’s supply chain are reporting that the third-generation device maintains a strong interest from consumers. However, there is an issue with supply, he said.

iPad shipments have been limited recently by the supply of Retina displays from the likes of Samsung, LG Display, and Sharp. While Samsung is the main supplier, the latter two companies recently began making small-volume shipments after overcoming an initial struggle to produce the high-resolution panel. Now that LG Display and Sharp are also supplying, Wu expects the situation to improve.

However, there is another factor behind the limited supply, Wu said. Now that Foxconn is “conforming to more sound labor practices” by cutting worker overtime, there simply aren’t enough staff to assemble the iPad at the same rate that Foxconn used to. “This is in an effort to improve working conditions,” Wu said. “From our understanding, the irony is that many employees prefer to work more overtime.”

But the issues haven’t prevented Wu from increasing his estimates for iPad sales. He initially predicted Apple would sell 11.5 million iPads during the recently concluded March quarter, but he has increased that estimate to 12.3 million iPads based on continued demand for the device.

During the 2012 calendar year, Wu expects Apple to sell 63 million iPads in total.

[via AppleInsider]