Hon Hai Precision Industry aka Foxconn, which assembles iPhones and iPads for Apple, but also consumer electronics on behalf of other vendors, has started hiring assembly-line workers in the tens of thousands in preparation for Apple’s next iPhone, both Bloomberg and the credulous Wall Street Journal reported Monday.
People familiar with the matter tell the publications that the world’s largest contract manufacturer has been recruiting workers for the past month at its plant in Zhengzhou, eastern China.
The reports come following February indications pointing to Foxconn imposing a recruitment freeze across almost all of its factories in China after more workers returned from the Chinese New Year break than did last year, a move some attributed to the supposedly weakening iPhone demand…
According to Bloomberg:
Foxconn recommenced hiring at Zhengzhou a month ago, with the facility currently employing about 250,000 to 300,000 people, Liu Kun, a spokesman for the Taipei-based company, said by phone today without saying how many employees were added.
He declined to comment on products or clients.
The Wall Street Journal corroborated the Bloomberg report, adding Monday that Foxconn has hired 10,000 workers a week since the end of March.
“We have been very busy recently as we will start mass-producing the new iPhone soon,” said a Zhengzhou-based executive who has direct knowledge of production plans.
Both reports point to Apple gearing up for production of the new iPhone, with the Journal expecting iPhone 5S production to begin in the second quarter of the year, possibly alongside a rumored budget model of the handset meant to improve Apple’s standing in emerging markets.
This jives well with KGI Securities analyst Ming-Chi Kuo’s note to clients from last week, indicating the next iPhone and iPad mini might not hit the market until Fall due to several “technical challenges” related to manufacturing.
Foxconn employs more than 1.4 million workers in China and has hired around 300,000 in Zhengzhou last year. Apple accounts for an estimated 60 to 70 percent of Foxconn revenues.
The contract manufacturer last week posted a nineteen percent decline in first-quarter sales. This is usualy a tell-tale sign of decreasing iPhone demand as Apple ramps up production of a next-gen model. The drop filed as the biggest decline for Foxconn in at least thirteen years.
Apple, which refreshes its handset once a year, typically sees sales peaking in the first quarter of availability. Demand then grows into the following quarter, before it starts declining over the remaining two quarters of availability.
So, who’s excited already?
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