Smartphone makers large and small are facing trouble getting products to market this week.
Apple’s main assembler of iPhones in China, Foxconn, saw two work stoppages on October 5, involving between 3,000 and 4,000 workers. The organization that originally reported the work stoppages, China Labor Watch, said that workers in Zhengzhou were unable to comply with stricter quality control standards on the iPhone 5.
The UK’s Financial Times quoted Foxconn as saying there was “basically no impact on the production lines” as a result of the strikes, but also said that Foxconn has been dealing with “chronic labour shortages” trying to meet the demand for Apple and other electronics makers.
Meanwhile, Chinese telecommunications equipment makers Huawei and ZTE are facing difficulties of a different nature: a report from a U.S. Congressional committee calling them security threats. The Intelligence Committee in the House of Representatives released the report Monday morning, encouraging American businesses to buy product elsewhere.
The core of the issue with Huawei and ZTE seems to be a worry over how much influence the Chinese government might have over the companies’ internal workings. “Neither company was forthcoming with detailed information about its formal relationships or regulatory interaction with Chinese authorities,” said the 52-page report, as quoted by CNET. “Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."
Both companies make routers, switches, and other equipment, but are best known in the U.S. for low-cost smartphones such as the ZTE Warp and Huawei Ascend lines. According to Reuters, U.S. sales make up about 4 percent of Huawei’s revenue and 2 to 3 percent of ZTE’s, the bulk of which is smartphone sales.
China’s foreign ministry responded with a statement emphasizing that both companies ran their businesses “based on market economy principles.”
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