By PETER SVENSSON and joe mcDonald
September 26, 2012
Apple’s iPhone 5 debuted with more than 5 million units sold in three days and a company that makes Apple’s iPhones suspended production Monday at a factory in China after a brawl by as many as 2,000 employees at a dormitory injured 40 people.
The iPhone sales figure was fewer than analysts had expected. Apple shares fell $9.30, or 1.3 percent, to close at $690.79 on Monday.
The shares hit an all-time high of $705.07 Friday as the phone went on sale in the U.S., Germany, France, Japan and five other countries.
The Taiwanese-owned company that owns the factory where the fight occurred declined to say whether that factory is involved in iPhone production. It said the facility, which employs 79,000 people, will reopen Tuesday.
The fight, the cause of which is under investigation, erupted Sunday night at a privately managed dormitory near a Foxconn Technology Group factory in the northern city of Taiyuan, the company and Chinese police said. A police statement reported by the official Xinhua News Agency said 5,000 officers were dispatched to the scene.
Foxconn makes iPhones and iPads for Apple Inc. and also assembles products for Microsoft Corp. and Hewlett-Packard Co. It is one of China’s biggest employers, with some 1.2 million workers in factories in Taiyuan, the southern city of Shenzhen, in Chengdu in the west and in Zhengzhou in central China.
The unrest happens at a critical time for Apple. The iPhone 5 quickly sold out in most stores in the U.S. and Apple has a three- to four-week backlog of online orders as it ramps up production to meet demand.
The fight in Taiyuan started at 11 p.m. on Sunday, “drawing a large crowd of spectators and triggering chaos,” a police spokesman was quoted by Xinhua as saying.
Order was restored after about four hours and several people were arrested, said the company, a unit of Taiwan’s Hon Hai Precision Industry Co. It said 40 people were taken to hospitals for treatment.
The violence did not appear to be work-related, the company and police said. Comments posted on Chinese Internet bulletin boards said it might have erupted after a security guard hit an employee.
Photos posted on microblog service Sina Weibo showed broken windows, a burned vehicle and police with riot helmets, shields and clubs.
Phone calls to police headquarters and the Taiyuan city hall were not answered. In the past year, Foxconn has faced scrutiny over workers’ complaints about wages and working hours. The company raised minimum pay and promised in March to limit hours after an auditor hired by Apple found Foxconn employees were regularly required to work more than 60 hours a week.
Apple’s weekend iPhone 5 sales tally is a record for any phone, but it beats last year’s iPhone 4S launch only by a small margin. Apple said then that it sold 4 million phones in the first three days.
Topeka Capital Markets analyst Brian White expected Apple to sell 6 million to 6.5 million iPhone 5s in the first three days. He said the shortfall was largely due to limited supply. White said the phone was sold out at 80 to 85 percent of the U.S. Apple stores he and his team contacted Sunday evening, and the ones that were still available were mostly Sprint models.
Online delivery times have stretched to three to four weeks.
The phone will go on sale in 22 more countries on Friday and in more than 100 countries by the end of the year.