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Apple puts supplier Foxconn’s India plant on notice after protests

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Apple said it had placed the southern Indian factory of iPhone assembler Foxconn on probation after both companies found that some worker dormitories and dining rooms did not meet required standards.

Apple did not explain what probation meant.

When it placed the southern India plant of another supplier, Wistron Corp, on probation after unrest last year, it said it would not award that company new business until it addressed the way workers were treated.

The latest action follows protests that erupted this month after more than 250 women who work at the Foxconn plant and live in one of the dormitories were treated for food poisoning. More than 150 were hospitalised, Reuters reported.

The plant, which is located in the town of Sriperumbudur town near Chennai and employs about 17,000 people, was closed on Dec 18. Apple and Foxconn did not say when they expected it to reopen.

A spokesperson for Taiwan’s Foxconn said on Wednesday that it was restructuring its local management team, taking immediate steps to improve facilities and added that all employees would continue to be paid while it makes necessary improvements to restart operations.

An Apple spokesperson said on Wednesday it had dispatched independent auditors to assess conditions at the dormitories “following recent concerns about food safety and accommodation conditions at Foxconn Sriperumbudur.”

Apple said it had found that some of the dormitory accommodations and dining rooms, which were not on the factory’s premises, did not meet its requirements and that it was working with the supplier to ensure a comprehensive set of corrective actions, adding that it will ensure its strict standards are met before the facility reopens.

A senior government official familiar with the matter said Foxconn has been answering queries from the state government on amenities provided to workers. “Once they get clearances from the government, workers will be inducted and the company will resume production,” the official said.

A second official said the reopening of the Foxconn plant in Chennai could be delayed until Monday.

Earlier this week, Reuters reported that Foxconn as well as 11 of its contractors including those who provide food and living facilities, were summoned for a meeting with the state government and that officials had asked Foxconn to review services provided to the workers, including power backup at the hostels, food and water.

The impact on Apple from the closure of the plant, which makes iPhone 12 models and has started trial production of the iPhone 13, is expected to be minimal, analysts have said. But the factory is strategic in the long term as the U.S. tech giant tries to cut its reliance on its Chinese supply chain amid trade tensions between Washington and Beijing.

(Reporting by Sayantani Ghosh, Sudarshan Varadhan in Chennai, Chandini Monappa in Bengaluru, Dawn Chmielewsk in Los Angeles and Stephen Nellis in San Francisco; Editing by Christian Schmollinger, Kenneth Maxwell and Raju Gopalakrishnan)

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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