While the full extent and damages of the riots that occurred at Foxconn’s Shanxi’s factory is not known, we do not expect the disruption to adversely affect iPhone’s supply. In the coming months, strong demand from consumers will ensure scarcity of supplies.
However, the riots could not come at a worse time. The contract manufacturer is ramping up production for the holiday season as it receives added scrutiny from the public, labour rights advocates and even the central Chinese government.
Apple Inc reported over 5 million iPhone 5 sold over the weekend. However, the early headstart by Samsung’s Galaxy S3 and other smartphone models will propel the Korean chaebol to overtake Apple as the market leadership in smartphones this year.