More Money, More Problems for iPhone City

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More money/more problems for Foxconn and its folks, a couple of concerns for Apple’s App Store, and a lot going on around Apple TV+ for kids.

Foxconn Significantly Increases Retention Bonuses at Zhengzhou iPhone Plant

In the wake of workers walking away from the Foxconn plant nicknamed “iPhone City” in Zhengzhou, China, I had wondered on The Daily Observations Podcast from The Mac Observer whether Foxconn had thought about throwing money at the problem. I’m not saying they were listening, but …

No doubt you know the story – we’ve been hearing it for over a week now. It started with workers being asked to dine in their dorms to fight a “small outbreak” of COVID-19. It then sped through Foxconn saying there was no problem, then not much of a problem, until reports surfaced that workers were jumping the fence and walking to their homes outside of Zhengzhou – actions they took after reports of a lack of food and proper medical care at the iPhone-making Foxconn facility. 

Let’s Throw More Money at the Problem

Now, a piece from The Mac Observer says Foxconn is upping the bonuses paid to iPhone-makers who stay and keep making iPhones. Initially, the piece says the contract manufacturer was offering “a daily bonus of 100 yuan” ~US$13.75 for each day worked. That would cap out at 1,500 yuan, ~US$200.

That was apparently not enough to keep people from  – you know … leaving. And so, more money to the … rescue? “Under the new offer,” the piece says:

…the daily bonus is now up to 400 yuan ($55). Any employee of the Zhengzhou iPhone assembly plant who works for more than 25 days can get a maximum bonus of 5,000 yuan ($687) for the month. 

What’s weird is, there’s maximum bonus, then there’s maximum bonus, it seems. While both TMO and the Reuters report on which it’s based list a maximum bonus of 5,000 yuan, the pieces have Foxconn saying that folks who put in their “full effort” for November, including no leave whatsoever – those people could end up with a total bonus ~15,000 yuan, ~US$2,000 for the month.

Reaction has been mixed, according to the report. Some will stay for the big money, while at least one worker interviewed said the conditions were too “horrible,” and that she was out.

Or … not.

New Lockdown Enacted

Authorities may have given workers good reason to take the deal last night. Or they may have made the offer moot. Just before recording late Tuesday night/early Wednesday morning, I spotted a Reuters (via Apple News+) report that said authorities over the area in which the iPhone City plant sits have enacted a new COVID lockdown. Starting immediately, the piece says all residents are barred from going out, and only approved vehicles are allowed on the roads. 

As it stands now, the restrictions will last until next Wednesday, Nov. 9. The piece says the tighter COVID lockdown raises questions about its impact on “efforts to quell discontent at the [Foxconn] factory.” No doubt that’ll also raise questions about already hampered iPhone production. Neither Apple nor Foxconn responded to Reuters’ request for comment.

BofA Notes Drop in App Store Sales

Apple shares were down on Tuesday and there was a note of concern about the App Store from Morgan Stanley analyst Wamsi Mohan. It’s hard to say whether the latter caused the former, though a headline from Seeking Alpha juxtaposed the two: “Apple gets nipped on report of App Store sales decline.”

Mr. Mohan has had a look at new numbers from app sales tracker Sensor Tower. For August through October, that firm says App Store sales were down 4% versus the same three months a year earlier. Also worth nothing – while App Store sales were down, “App Store downloads for both iPhones and iPads rose 2%” year-over-year. 

Is all of that thanks to the wobbly macro? Maybe. Or maybe in part. While folks are likely pinching their pennies and tightening their belts in the face of higher prices and ahead of whatever’s ahead, there’s other stuff going on. Quoting the report:

Among the Sensor Tower data that Mohan said stood out was App Store revenue from China falling 3% in October on a year-over-year basis. Mohan also said the decline in gaming revenue from China was likely due to a slower pace of approvals for gaming licenses, and a higher rate of unemployment among Chinese youths.

Also worth noting, while App Store sales are said to be down, Services revenue was up last quarter. According to Apple’s Q4FY22 earnings, Services generated $19.2B in the September-quarter versus $18.3B in the same quarter a year earlier. 

Mr. Mohan has a “Neutral” rating on Apple shares. His price target on the shares is $160.

EU’s DMA Looms on the Horizon

Huge changes for Google and Apple from the European Union are in the offing. AppleInsider says yesterday, Nov. 1, is when the EU’s Digital Markets Act (DMA) “entered into force.” Sort of. 

If Apple and Google are deemed “gatekeepers” by the European Union (and there’s pretty much no way they won’t be), the changes could be seismic – especially for Apple. According to the report:

Some provisions of the DMA would force Apple to allow third-party app stores and side-loading on iPhone, let developers use third-party payment systems, enable users to set a voice assistant other than Siri as their default, and more.

More like not giving their own products or apps preferential treatment. AppleInsider and others have speculated that that could forbid Apple from highlighting services like Apple Music, Apple Arcade, and the App Store itself. 

The piece has Gerard de Graaf, an EU official who helped pass the DMA, swinging through the states to talk with companies likely to be affected. He’s quoted in the piece as saying:

We expect the consequences to be significant… If you have an iPhone, you should be able to download apps not just from the App Store but from other app stores or from the internet.

The key message is that negotiations are over, we’re in a compliance situation… You may not like it, but that’s the way it is.

I said the DMA sort of “entered into force” on Tuesday. AppleInsider says it’ll be applicable on 2 May 2023, though I sort of want to put a “kind of” after that. The piece says the “EU will announce the group of companies” deemed gatekeepers next spring. After that, the piece says the companies “will have six months to comply with the law.”

Three Mid-Teens iMacs Headed for Obsolete Status

A few old Macs look to be headed for obsolescence. MacRumors says it’s heard of four machines headed to Apple’s “Obsolete” list at the end of this month. They’re said to include:

  • The 21.5-inch and 27-inch ‌iMac‌ from Late 2013
  • The 21.5-inch iMac from mid-2014 
  • The Retina 5K 27-inch ‌iMac‌ from late 2014

“Obsolete” basically means end-of-the-line as far as Apple’s concerned. Machines on that list are no longer eligible for repair or service from Apple or its authorized service providers. 

Two Kids Series Coming Soon to Apple TV+

News of a couple of Apple TV+ kids series on the way – one trippy, the other less so. On the less so side, the Cupertino-streamer has issued a press release and a trailer for the animated series Interrupting Chicken.

Based on the 2011 Caldecott Honor-winning book series written and illustrated by David Ezra Stein, [the release says] “Interrupting Chicken” is an animated preschool series that introduces children to the joy of creative writing — starting with a young little chicken named Piper who has a habit of interrupting storytime! Every time Piper hears a story, she can’t help but jump in, ask questions and let her imagination run wild.

The series hits Apple TV+ on Friday 18 November. Between now and then, you can catch the trailer now on YouTube.

On the trippier side, something for the older kids. A separate press release from Apple TV+ highlights the thought-provoking sci-fi series Circuit Breakers. According to that release:

“Circuit Breakers” is a half-hour anthology series about middle-schoolers in the near future that uses science fiction as a backdrop to tell universal stories about growing up.

Apple says:

Each installment of “Circuit Breakers” features a sci-fi twist on kid relatable stories, with the intent of kids and families asking themselves how they would act in each unique situation. 

Feels a bit like the series Eureka, for those who remember that – though with the emphasis on “anthology series,” each episode should be a one-off, not a continuing saga. Circuit Breakers hits Apple TV+ on Friday 11 November. You can also catch the trailer for that on YouTube. 

Apple TV+ Nominated for 17 Children’s and Family Emmy Awards

And finally today, the kids offerings on Apple TV+ seem to be standing the streamer in good stead. AppleInsider highlights a Deadline report that says 10 of the Cupertino-company’s children’s shows have nabbed 17 nominations for this year’s Children’s and Family Emmy Awards. Apple TV+ titles nominated include: 

  • Helpsters
  • Fraggle Rock: Back to the Rock
  • Who Are You, Charlie Brown?
  • El Deafo
  • Hello Jack! The Kindness Show 
  • and others

This is the first year for the Children’s and Family Emmy Awards. The piece says The National Academy of Television Arts & Sciences expanded the awards to their own category due to a “rapid increase in submissions for the genre…” You’ve gotta figure that has to do with the number of new players in the streaming game, including Netflix, HBO Max, Disney+, and Apple TV+.

The Children’s and Family Emmy Awards ceremony is set for two nights. They’ll be presented on Saturday, Dec. 10 and Sunday, Dec. 11

Today on The Mac Observer’s Daily Observations Podcast

There’s tech news that brings us down and tech news that boosts our spirits. TMO Managing Editor Jeff Butts joins me today, as each of us brings one bothersome story and one happy story to the mix. That’s all today on The Daily Observations Podcast from The Mac Observer.

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