Foxconn says cannot meet demand for iPhone 5 
 
 TAIPEI — Taiwan's Foxconn has admitted that it cannot meet strong demand for Apple's new iPhone 5 due to difficulties in building the gadget, as investors grow concerned about the US giant's future earnings. 
 
 "We can't really fulfil Apple's requests. Our shipments are insufficient... given the huge market demand," Foxconn chairman Terry Gou told reporters late Wednesday. 
 
 He added that the design of the iPhone 5, of which five million were sold over its launch weekend in September, has made production difficult, but did not elaborate. 
 
 He declined to say whether Foxconn plans to outsource some of the iPhone orders to other makers. 
 
 The iPhone has been a huge driver of Apple's phenomenal profits, along with the iPad, both of which are made by Foxconn, which also manufactures products for other firms such as Nokia, Intel and Sony. 
 
 Peter Oppenheimer, Apple's Chief Financial Officer, said on October 25 that demand for the iPhone 5 continued to outstrip supply, but that it was working hard to catch up. 
 
 Last month the firm, which is based in Cupertino, California, said net profit in the July-September quarter climbed to $8.2 billion thanks to a 58 percent jump in sales of its phones and a 26 percent rise in tablet sales. 
 
 But Apple's shares have fallen in recent weeks owing to concerns it may not be able to meet demand in the near future, as well as increased competition from rivals including Samsung. 
 
 Mars Hsu, an analyst at Grand Cathay Securities, said Apple's main worry was in product innovation, as the new iPad and iPad Mini did not appear to be very different from competitors' gadgets. 
 
 Apple has also faced much criticism since the launch of the iPhone 5, following a number of problems. 
 
 It was forced to apologise soon after the phone's launch because of its glitch-ridden maps application in the new operating system, which led the firm to urge customers to use rival apps while improvements were made. 
 
 The company is also undergoing a management overhaul and last month announced the executive in charge of Maps, Siri and other software in the iPhone is leaving as part of a shakeup. 
 
 Taiwan-based Foxconn is the world's largest contract electronics maker and assembles products for Apple, Sony and Nokia, among others in its factories in China. 
 
 The company has come under the spotlight after suicides and labour unrest at its Chinese plants in recent years, which activists have blamed on tough working conditions, prompting calls for better treatment of staff. 
 
 Foxconn employs more than one million workers in China, roughly half of them based in its main facility in Shenzhen, which borders Hong Kong. 
 
 -- Dow Jones Newswires contributed to this story -- 
 
 Copyright © 2012 AFP. All rights reserved. More » 

 Autumn is traditionally the time of year when people start snapping up Apple products. It’s also when investors, in anticipation of another blockbuster holiday season from the company, do the same with Apple shares. 
 
 But this year, even though Apple’s iPhones and iPads don’t seem to have lost any of their allure for holiday shoppers, its stock seems headed straight for the discount rack. 
 
 On Wednesday, Apple’s shares slid 3.8 percent. They outpaced a broader decline in the stock market set off by investors’ uncertainty about how the outcome of the presidential election will affect taxes and consumer demand for the types of products Apple sells. 
 
 During the campaign, President Obama proposed increasing capital gains tax rates for people earning over $250,000 to 20 percent from the existing rate of 15 percent, and his re-election Tuesday night may have prompted some investors to unload shares in anticipation of a broader sell-off in stocks ahead of a tax increase, analysts said. 
 
 Owners of Apple shares would have good reason to fear higher taxes on capital gains. Apple shares have appreciated mightily since 2005 when they were about $35 apiece; they began this year at $411 and peaked at more than $700 in late September. The drop on Wednesday only added to what has been a grim few weeks for Apple shares, which have fallen over 20 percent from that peak, to $558 on Wednesday. 
 
 The decline has followed a sequence of seemingly unrelated events, including a broader-than-normal overhaul of its product line that is expected to hurt profit margins in the near term and a rare shake-up in Apple’s senior ranks. 
 
 “It has just been wave after wave of bad news,” said Gene Munster, an analyst at Piper Jaffray. 
 
 The events also do little to diminish the questions reflecting longer-term concerns with which investors pepper analysts like Mr. Munster. How much bigger can Apple — with a $525 billion market value, the biggest of any corporation — get? Won’t Apple soon run out of people to sell iPhones, iPads and Macs to? 
 
 Those concerns have been one of the biggest reasons Apple’s stock has long traded at a discount, strange as that may sound, to its peers in the tech business. Apple’s forward price-to-earnings ratio — the value of the company’s stock divided by its expected earnings per share for the coming year — is just under 10. 
 
 That figure is 14 for Google, 32 for Facebook and 131 for Amazon. Steve Dowling, a spokesman for Apple, said the company generally did not comment on its share price. 
 
 Apple executives have said they still see huge opportunities for the company and it is still growing at a remarkable clip for a company its size. During its last fiscal year, which ended Sept. 29, Apple’s revenue jumped 45 percent to $156.51 billion and its profits rose 61 percent to $41.73 billion. 
 
 While Apple’s most recent financial report was mostly in line with Wall Street forecasts, the company warned that its profit margin would most likely decline in the holiday quarter because of a sweeping refresh of the company’s iPad, iMac and MacBook laptop lines. 
 
 Apple products often cost more to make during their first months on the market, but those costs come down as the process becomes more efficient and volumes increase. The company said its new iPad Mini would be among those products with low profit margins, raising concerns that Apple will make less money as it competes in lower-priced segments of the mobile market. 
 
 Apple’s worrisome financial report came just days before Apple announced the departure of Scott Forstall, the head of its mobile software development, in a move that it said was aimed at increasing collaboration between departments at the company. Apple split the responsibilities of Mr. Forstall, who was a divisive figure at the company, among an array of other Apple executives. 
 
 The surprise firing of Mr. Forstall was unusual for Apple, where turnover in its senior ranks is rare compared to other big technology companies. 
 
 Then late last week, the research firm IDC reported that 75 percent of smartphones shipped in the third quarter were Android phones, the main rival to Apple in mobile software. A year earlier, Google, the maker of Android software, had market share of 57.5 percent. The iPhone’s share rose at a much slower pace, jumping to 14.9 percent of shipments from 13.8 percent, IDC estimated. 
 
 But Apple is still making huge profits from the mobile market, far more than Google is. Even with the recent decline in its shares, Apple’s stock is still up 38 percent for the year. 
 
 David Rolfe, chief investment officer at Wedgewood Partners, which counts Apple as its biggest stock holding, said he remained confident that Apple was one of the best investments around. 
 
 “The bears think Apple is in the eighth inning,” Mr. Rolfe said. “We think they’re still in the fourth or fifth inning.”
– Investors might finally be falling out of love with Apple. Despite the buzz around the iPad Mini, Apple's shares have fallen 20% since their September peak, from $700 a share down to $558, the New York Times reports. Why? Because where a layperson might see a big slate of exciting new products, Wall Street sees profit liabilities—new products tend to have thinner margins at first, until the manufacturing process gets streamlined and volume picks up. Case in point: Foxconn yesterday admitted that it can't keep up with demand for the iPad Mini, reports the AFP. "We can't really fulfill Apple's requests," says its chairman. "Our shipments are insufficient." Add that to the recent management shakeup, a report that Android's market share had jumped from 57.5% to 75%, and the always looming worries that Apple, already the market's most valuable company, is running out of room to grow and people to sell gadgets to, and you've got plenty of food for bears. "It has just been wave after wave of bad news," one analyst says. But Cupertino executives say the company is still growing just fine, and hey, the stock is still up 38% on the year.