Why is Foxconn looking beyond Apple, its largest partner? What will the company do? These are two topical issues.
The New York Times reported this week that Foxconn and its chairman, Terry Gou, are “contemplating life far, far beyond Apple.” The matter is that the company intends to lessen its reliance on Apple.
Foxconn is expected to start developing products of its own, and has also got results in designing and manufacturing high-definition television sets. Besides the company has already bought a stake in panel maker. There were rumors of a possible Apple television set, and Foxconn’s interest in Sharp has helped to inspire them.
Foxconn’s first-quarter revenue was down 19.2 percent to the previous year. The matter is that Apple suffered from large declination of orders of the iPhone and iPad. In 2013, Apple hasn’t produced any products, but it’s only the beginning. Thus, CEO Tim Cook said that major new products will be released this fall and in 2014. No reason to deny, that Apple’s customer gor accustomed to innovations and the lack of something new causes fewer purchases and orders.
Previously, iPhone and iPad launches were presented throughout the year, that allowed Apple to maintain public mindshare through its two most popular product versions.
According to the latest reports 8 Million iPhones were returned “due to appearance of substandard or dysfunctional problems.” This could cost Cupertino’s top manufacturer up to $1.6 billion.
Anyway, the report doesn’t point out any specific problems with the handsets. Besides, ther’s no concrete information which models were returned.If the party was made up of existing models, such as the iPhone 5 and iPhone 4S, this could eventually show up as a hole in Apple’s supply chain. However, if these defective models were in fact “iPhone 5S” models, Apple may be forced to delay the launch of its newest handset.
Foxconn reportedly began production of the iPhone 5S earlier this month. As of now, Apple is expected to announce the seventh-generation iPhone at the Worldwide Developers Conference in June.
Two of Apple’s top suppliers are reportedly adding staff in apparent anticipation of an uptick in demand for their services. TSMC, which manufactures Apple’s custom A-series chips, and Hon Hai Precision, parent company of Foxconn and longtime Apple manufacturing partner, will add 5,000 new jobs each, Reuters reported on Monday, citing the Taiwanese Economic Daily. The two companies have apparently begun posting recruitment notices at events designed for graduating Taiwanese university students.
For Hon Hai, the new hiring surge is the largest of its kind in recent years. Hon Hai will reportedly be hiring largely research and development personnel. Those workers will head into automated production, e-commerce, and robots. TSMC, meanwhile, is recruiting largely for equipment managers.
The new hiring may indicate that Apple and its suppliers are gearing up for a new wave of Apple products. Apple CEO Tim Cook said earlier this year that Apple’s product line was “chock full of incredible stuff,” though Cook declined to go into specifics on what consumers could expect.
Cook also cautioned against reading too much into any Apple supply chain happenings. The company, Cook said, sources its materials from a wide range of suppliers, so looking to any one or two particular suppliers is unlikely to give true insight as to Apple’s plans or fortunes.
Monday’s report seems to fly in the face of other reports from analysts that “channel checks” showed Apple suppliers suffering through a rough February. CNN relayed on Monday Topeka Capital analyst Brian White’s findings, which saw a 31 percent decline in sales companies examined by White’s “Apple Monitor.” Hon Hai, according to White, saw a 25 percent month-over-month drop in sales for February.
Fresh rumors out of the Far East say that Apple manufacturing partner Foxconn has already started production of the so-called iPhone 5S, with the next-generation handset reportedly being built on the same lines as the current iPhone 5.
Citing a source familiar with the matter, Japanese Apple blog MacOtakara reported that Foxconn is starting to ramp up production of Apple’s iPhone 5 successor. The site noted that because the design of the “iPhone 5S” is substantially the same to the company’s existing handset, little to no tooling is needed to manufacture the two models on the same production lines.
In a note to investors in January, Jefferies analyst Peter Misek estimated that production of the next-generation iPhone would begin in March ahead of a launch expected in either June or July. He also predicted that Apple will be launching a second smartphone alongside the 5S, possibly a much-rumored low-cost version targeted at developing markets.
MacOtakara also claimed that Japan’s number one cellular provider NTT DoCoMo, which is not yet an Apple partner carrier, is apparently reducing orders for Android-based smartphones for the upcoming fall 2013 season. The supposed move has prompted rival carriers to speculate that DoCoMo may soon start sales of the iPhone.
Speculations around the release of the latest iPhone are beginning to have some light. Early rumors suggested that it was by March but in conjunction to this update, it seems that the “cheap” iPhone 5S will be released by this June. Insiders also stated/added that the iPhone 5S will also have the latest iOS (iOS 7). Only time can tell if the rumors are true.
According to Financial Times, Foxconn implemented a hiring freeze at most of its Chinese facilities due to the reduction of iPhone 5 demands. Foxconn denied that the move was related to any single customer and added that “any speculation to the contrary is false and inaccurate.”
The Financial Times noted that it was the first time since a 2009 downturn that the company opted to halt hiring in all of its facilities across the country. The publication talked to multiple recruiters. “Currently, none of the plants in mainland China have hiring plans,” said Liu Kun, a company spokesman at Foxconn’s largest manufacturing facility, in the southern Chinese city of Shenzhen across the border from Hong Kong. Human resources officials at Foxconn’s largest factories, local government officials and external recruiters working with the company said there had been internal notices on Tuesday and Wednesday to halt hiring until at least the end of March, in response to reduced orders for the iPhone 5.”
Another Foxconn spokesman, Bruce Liu, gave a different explanation in a phone interview. Foxconn halted recruitment until the end of March after more employees returned from the Chinese New Year break than a year earlier, Bruce Liu, a spokesman for the Taipei-based company, said today in a phone interview. The decision wasn’t related to iPhone 5 production.”
Speculation will be running wild on what prompted the hiring freeze of Foxconn. Giving different explanations coming from one spokesman to another just fueled the rumors about the true reason regarding this.
9to5 Mac provided a video from inside the Foxconn Company. Rob Schmitz, the reporter that made the video highlights the assembly process of an iPad gadget and goes further in the assembly line at the company’s plant in Shangai.
As described in the video, workers are kids between 18-25 years old, the majority of them being migrant ones. When first staring, employees receive $14 a day, switching positions every few days.