Foxconn, the largest assembler of iPhones, denied reports that it was giving workers an early start to the annual Chinese New Year holiday after Apple cut back on orders due to falling sales.
A Foxconn representative told the Taipei Times that it did not lay off staff in China in the middle of December.
Media reports said the Zengzhou city government had offered Foxconn CNY80 million ($12 million) in subsidies to minimise the scale of layoffs at its plant in the city.
But Foxconn, known as Hon Hai Precision in Taiwan, said it received the incentives from the city as a reward for providing employment in Henan province in 2014. It was among 135 companies that received such payments.
The representative said it is planning production schedules for the Chinese New Year holiday, which officially starts on 8 February, to ensure each worker has a normal holiday and would comply with Chinese regulations.
Pegatron, another iPhone assembler, said its employees in China would have the usual holiday break. “There is too much noise in the market at the moment. Some reports are one-sided and inaccurate,” a Pegatron investor relations executive told the Times.
But iPhone shipments in Q4 are expected to increase by only a single-digit percentage and are likely to drop 5-10 per cent in Q1 as sales of the iPhone 6s and 6s Plus were weaker than expected, according to Taipei-based Digitimes Research.
The research firm found a significant gap between the OEM production volume of iPhone 6s/6s Plus units and the sales volume of the devices in Q3. As a result, it estimated 13-15 million iPhone 6s unit will be booked as deferred sales by Apple for Q4.
Given that OEM iPhone orders totaled more 75 million units in Q4, Digitimes Research expects that deferred sales bookings will continue in Q1, widening the gap between end-market sales and orders to OEM suppliers.
Japan’s Nikkei newspaper reported earlier this week that Apple is expected to cut production of the iPhone 6s models by 30 per cent in Q1 due to mounting inventories.