Rotten Apples?

Apple moved only 5 million of its iPhone 5 products, on expectations of 8-10 million. Slow sales are one thing… slave riots in Chinese factories is another. FoxConn shut down the iPhone 5 production facility in Taiyuan after 2000 workers rioted there yesterday. Apple has already shrugged off accusations of horrendous labor conditions in its Chinese sweatshops and the factory will only be closed a few days, so no big worry, right?

Well… seems as though FoxConn is tossing around ideas to slap its own sticker on the iPhone 5 and market it as an OEM brand. They’re the ones that make it, after all. Apple has no other manufacturing facilities, so if FoxConn wants to pull a Bill Gates and leave its partner in the dust after it’s learned all it can from said partner… looks like they’d be able to pull it off.

This matters in a huge way because Apple stock seems to be the refuge of last resort for many a pension fund. The stock has already slipped 2% on news of the slow sales. How much more would it drop if FoxConn terminated its contract? And then what of the pensions that are desperately trying to recover the money they lost in 2008?

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