Apple’s biggest iPhone supplier is taking a rare week long break

Apple demand and Foxconn Vacations

Apple’s largest device supplier, Foxconn, is cutting working hours over the week-long Lunar New Year Holiday, a possible sign that Apple is experiencing softening demand for its various devices.

Reports over the last several days have found slowed shipments and inventory stockpiles for the iPhone 6S and 6S Plus, suggesting a typical slowdown in sales for the slower first quarter.

Japanese daily Nikkei, citing parts suppliers, says output of all iPhone models would be cut by about 30% in January to March so dealers could unload stock.

“Chinese New Year is a big holiday and there is usually overtime for workers. But this year, Foxconn will have a normal break,” the person said, referring to the Lunar New Year which falls on February 8.

Taiwan-based Foxconn is responsible for assembling the latest iPhones at factories in China where it employs hundreds of thousands of people. Typically over the Chinese holiday the company offers triple overtime pay to workers.

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Foxconn says its “in the midst of planning operational schedules for the Lunar New Year holiday,” but gave no details.

The government of the Zhengzhou, Henan province issued subsidies of 82 million yuan ($12.53 million) to Foxconn in the last week, another gloomy sign for some investors. Foxconn confirmed the incentives which it says were meant to “recognize companies that provide stable employment in the province.”

Foxconn says the subsidies  were related to the large workforce it maintained in the province in 2014.

Shares of Apple suppliers fell on Wednesday, with Foxconn closing down 0.1% after trading.

Apple revenue is expected to increase just 4% over its current fiscal year. In comparison, the company’s business year ending in September saw a year-over-year revenue increase of 28%.

Written by Franklin Simmons

Franklin Simmons

Franklin Simmons is BusinessPundit's Tech Editor. His life is consumed with a love of augmented reality, mobility, and emerging technology. He extensively covers all areas of technology, including the computing, automotive, and healthcare sectors.