Home » Behavioural Investing » Foxconn Apple’s Achilles Heel? $AAPL

Foxconn Apple’s Achilles Heel? $AAPL

iPhone 5 Mockups

iPhone 5 Mockups (Photo credit: methodshop.com)

Apple (Nasdaq:AAPL) hype machine has scored another touch down as it whips up mass hysteria for the i5 smart phone. (Yes I will buy one soon I just don’t do line ups). But what about supply chain issues? More to the point what’s up with the riots at Foxconn. We have all heard of labour disputes and picket line violence. The rumble involved some 2,000 employees at the dormitories. This may be the largest incident of employee on employee violence in modern history.

No word on what sparked the rumble. sociologists have long validated the theory of biting rats and crowded living conditions. News reports indicate the police were able to restore order. In China this means they cracked more than just a few heads.

For all the sainted glory that is Apple’s they do rely on Foxconn to crank out the units. As do many other western branded products. If this becomes a continuing problem Apple will experience something called supply interruption. Nothing in the iPhone and iPad experience relates to supply interruption. customers will wait in line overnight to get the latest unit. But they do not want to know the store is backordered because of a riot in a factory.

The PR promotion machine cannot fix that one. Apple needs to extricate itself completely.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti