Hon Hai Precision Industry, better known as Foxconn, has long been Apple’s biggest manufacturing partner, with around 60-70% of its revenue coming from the Cupertino company. But local rival Pegatron is hoping to change that.
By offering Apple more competitive prices and sacrificing its profit margins, Pegatron appears to be securing iPhone and iPad assembly orders that would have normally gone straight to Foxconn.
Foxconn has been forced to make preparations for life after Apple following reduced demand for the iPhone and other iOS devices which has caused the company’s revenue to nosedive, The New York Times reports.
The manufacturer has been doing well off the back of Apple’s hugely successful devices in recent years, which have been contributing at least 40% of its revenue, according to analyst estimates. But after suffering a 19.2% drop in revenue during the first quarter of the year, thanks to declining iPhone and iPad orders, Foxconn is now looking at ways in which it can be less reliant on Apple.
Foxconn is notorious for its tough working conditions and labor practices, but the company has started relaxing on some of its strict factory rules after two recent suicides occurred at its Zhengzhou factory last month.
Starting now, Foxconn has decided it will stop forcing workers from fraternizing with one another during work hours. Foxconn’s factories have used a “mute mode” policy with workers that prohibits any conversation that is not relevant to their jobs while in the workshop, but the iPhone-maker has decided it’s probably good for workers’ health to be able to talk to each other.
Apple’s quarterly profit probably fell for the first time in over a decade, thanks to new products with lower profit margins and a slowing demand for the iPhone, Bloomberg reports. Fourteen analysts have reduced their estimates for Apple in recent weeks, and on Friday, the Cupertino company’s share price fell below $400 for the first time since December 2011.
A Chinese paper is reporting that Apple and Foxconn may have had a staggering setback in the production of the iPhone, with up to eight million iPhones returned to Foxconn because they didn’t meet Apple’s standards.
The New York Times has won the 2013 Pulitzer Prize for “Explanatory Reporting” for its nine-part iEconomy series into Apple’s business practices and the working conditions inside Foxconn’s Chinese factories.
The Times was praised for its “penetrating look into business practices by Apple and other technology companies that illustrates the darker side of a changing global economy for workers and consumers.”
Foxconn has begun taking on new workers as it prepares to begin production of Apple’s next iPhone, according to two seperate reports from Bloombergand The Wall Street Journal.
The company has added to its numbers at an iPhone plant in Zhengzhou, eastern China, ending a freeze on recruitment that was implemented back in February. The new workers will reportedly assemble the upcoming “iPhone 5S,” as well as existing models that Apple has requested to boost capacity, a supply chain source said.
Foxconn sales declined 19% during the first quarter of 2013, and “disappointing” demand for Apple’s iPhone is getting the blame, Reuters reports. Between January and March, the company’s sales totaled NT$808.97 billion ($26.96 billion), down from NT$988.24 billion ($32.99 billion) in the fourth quarter of 2012, and NT$1 trillion ($33.38 billion) a year ago.
Apple and Foxconn’s jumper problem might not be a thing of the past after all, as reports over the weekend broke that two workers have jumped from the roof of Foxconn’s Shenzhen factory on Friday in reaction to job cuts, lowered wages and the end of free amenities at the world’s largest gadget manufacturer.
A “confidential presentation” that outlines the upcoming product plans for a manufacturer based in Shenzhen, China, suggests the iPhone 5S could launch in June this year. Most rumors have suggested the device wouldn’t arrive until this fall, around 12 months after the iPhone 5, but an accessory manufacturer with direct links to Foxconn is confident it’ll be here much earlier.