GigaOM » foxconn

If Apple decides to make a television, Foxconn will be ready to build it

Erica Ogg — Tue, 07 May 2013 14:44:28 +0000

The biggest and most important client of Taiwanese manufacturing giant Foxconn is Apple, and its ability to manufacture the iPhone and iPad has made it indispensable to the California company. As Apple’s fortunes have risen, so have Foxconn’s. But according to the New York Times, as Apple’s growth has slowed a bit, Foxconn has begun planning for a future “far, far beyond Apple.”

Time for Apple investors to panic? Not quite.

Foxconn, the story says, “wants to reduce its reliance on Apple. Its new strategy is a shift away from making products that other companies design, and toward developing products of its own, with an especially aggressive push into designing and manufacturing large, flat-screen televisions.” The idea is that Foxconn would be its own brand, not just the maker of products behind others’ brands. To do that, it’s invested in Sharp’s flat panel display factory and partnered with RadioShack (in China) and Vizio to sell its TVs.

But reading further, it becomes clear that it’s not quite that Foxconn is looking for ways to reduce its dependence on Apple; it’s really looking for ways to rely less on the iPhone.

The analysts quoted in the story believe that what Foxconn is up to by improving its ability to manufacture TVs quickly and cheaply is anticipating a move Apple may make. From the article:

Analysts say Mr. Gou’s efforts to buy an LCD factory and vertically integrate his television manufacturing represent anticipation that orders for an Apple television product will come his way.

In other words, Foxconn wants to produce the long-rumored Apple TV. That’s not a bad idea either: one day Apple is going to have to move past the iPhone too, or at least augment its hardware lineup in other ways. That may include wearable computing devices, a TV or something else entirely. Either way, Foxconn wants to be ready for whatever that next move is.

So Foxconn doesn’t actually appear to be looking to extricate itself from Apple; rather it’s looking to extend its relationship with the company further into the future.

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Foxconn nearing new iPhone production, reports point to summer launch

Erica Ogg — Mon, 15 Apr 2013 14:20:20 +0000

Reports are coming in that Apple’s chief manufacturing partner in China is hiring like crazy to start producing a new iPhone. On Monday the Wall Street Journal and Bloomberg both reported Foxconn is ramping up by recruiting thousands of workers in one of its main Chinese facilities.

Bloomberg says the hiring began in mid-March at a Zhengzhou factory, that already has 250,000 to 300,000 people, for working on a new Apple device as well as older model iPhones. The Journal says Foxconn has been hiring 10,000 new workers for assembly line production each week since then.

The Wall Street Journal got a quote from one unnamed Foxconn executive that works at the factory to corroborate the story:

“We have been very busy recently as we will start mass-producing the new iPhone soon,” said a Zhengzhou-based executive who has direct knowledge of production plans.

The timing of a prepping a new device for production would point to an earlier introduction than the fall, which the iPhone has seen for the past two years. And that does line up with other reports from earlier this month that Apple is planning on a summer iPhone launch.

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Foxconn sales drop could foreshadow Apple earnings

Erica Ogg — Wed, 10 Apr 2013 20:03:49 +0000

We’re getting closer to when Apple will report its quarterly results for its sales from January through March. And we have at least one sign that may shed some light on what to expect on April 23: Hon Hai Precision Industry Co., the parent company of Apple’s most important manufacturing partner, Foxconn, turned in some not-so-great earnings on Wednesday.

Reuters reported that Hon Hai saw a 19 percent drop in its sales from the same quarter a year ago. It saw sales of about $27 billion for the first quarter of this year, compared to $33.2 billion the same quarter in 2012.

It is possible that its sales are down because one of its other customers cut its orders way back. Apple is not Foxconn’s only customer; it manufactures hardware for many of the world’s most prominent device makers. But Apple is by far its biggest, thought to be responsible for up to 70 percent of Foxconn’s orders.

It also makes sense that Apple device orders from Foxconn could be down for the quarter: there was no big new Apple device launch between January and March and therefore no massive ramp up of new devices.

We’ll find out how much this was or wasn’t a reflection on Apple when it reports its fiscal Q2 results on April 23.

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Apple stock drops after reports of Foxconn hiring freeze

Erica Ogg — Wed, 20 Feb 2013 17:05:31 +0000

Apple’s most biggest and important manufacturing partner, Foxconn, is instituting a hiring freeze in its China factories until the end of March, but there are two different explanations for the move being offered. The Financial Times said it heard from unnamed Foxconn HR officials, recruiters and local government officials that it’s ceasing hiring “in response to reduced orders for the iPhone 5.” However, Foxconn told Bloomberg, in a separate interview, that the hiring freeze on new recruits has to do with the fact that more workers are returning.

The FT quotes an external recruiter for Foxconn’s factories who said hiring had stopped because of “fewer orders for the Apple products” and another who said “Foxconn’s demand for workers this year was as low as that in 2009.” A Foxconn spokesman only confirmed to the FT that the hiring freeze is on; he does not mention why.

Bloomberg got a different Foxconn spokesman to explain the reason for the freeze. He offered some more detail, saying: “Foxconn halted recruitment until the end of March after more employees returned from the Chinese New Year break than a year earlier.”

Apple’s investors either aren’t buying that explanation or are put off by the confusion surrounding the halt in hiring — Apple shares were down 1.61 percent to $452.60 on the news as of this posting.

This drop in need for more workers echoes reports published in January that demand for the iPhone 5 in the first three months of 2013 had dipped, causing Apple to cut its parts orders from suppliers in China.

It’s true that Apple has typically sold fewer iPhones in the quarter directly following the holiday season. Apple got the iPhone ready for sale in 100 markets between September and December, its fastest rollout ever, so the hiring halt could simply be a seasonal response.

Apple CEO Tim Cook last week at an investor conference said he sees plenty of growth left in the iPhone: “Frankly speaking, I see a wide open field. It may surprise you, but iPhone is only available to about 50 percent of the subscribers in the world.”

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You’re having trouble finding a new iPhone 5 due to its design

Erica Ogg — Wed, 07 Nov 2012 19:14:33 +0000

The president of Foxconn, the company that builds Apple’s mobile devices, told reporters in China on Wednesday that the iPhone 5 is so hard to put together that his normally speedy, cutting-edge factories cannot build the devices at the rate expected of them. And it’s not the first time someone from his company has said so.

“It’s not easy to make the iPhones. We are falling short of meeting the huge demand,” Terry Gou said, according to Reuters. His comments echo what an anonymous Foxconn official told the Wall Street Journal last month, that “the iPhone 5 is the most difficult device that Foxconn has ever assembled.” The reason? “To make it light and thin, the design is very complicated,” this person said.

Apple strives for distinctive, functional design that sets it apart from fads and from the competition, and the iPhone 5 represented a major update to the phone’s industrial design for the first time in two years. It’s 18 percent thinner than the iPhone 4S, is made of aluminum and glass instead of just glass, and weighs about 112 grams, 20 percent lighter than the previous model. Apple’s designers achieved this by selecting materials carefully and taking advantage of advancements in components, like the display, where the touch sensor is built into the glass, instead of remaining a separate layer.

But the device is so complicated that the company Apple and most of the consumer electronics world considers the best contract manufacturer on the planet can’t figure out how to build it in a way that keeps up with demand while maintaining quality. It’s worth wondering if perhaps Apple went overboard. At what point do we begin wondering what the guys in Apple’s design team were thinking?

I mean, I love how lightweight the iPhone 5 is, and the thinness is of course appreciated. And Apple should always look ahead to the future of what’s possible, not just stay within the industry’s expectations of how a phone should look and be made. But there are limiting factors they have to consider — was there no middle ground between thin/light/and manufacturable at a reasonably expected rate?

Apple is no stranger to high-demand/low-supply situations. The iPhone 4 was hard to get at first, for example, and so was the iPad 2 when it debuted in 2011. That tablet was actually backordered for months — but there were outside factors at play, like the earthquake in Japan, and Foxconn’s employee shortage. None of those shortages caused the manufacturer to actually blame the product itself though.

CEO Tim Cook’s background is supply-chain management and manufacturing, and it would be surprising for him to put the iPhone 5 on the company’s most aggressive roll-out schedule ever if he didn’t think they could meet those goals. But there could be other dynamics at work here: maybe Jony Ive, who leads the industrial design group, gets to have the iPhone design he wants and Cook figures out how to get it made in huge volumes. After all, as Steve Jobs told his biographer, Jobs set it up before he left “that there’s no one at the company who can tell Ive what to do.”

It will be interesting to see if this bears out as a case of Apple’s prioritization of design having any negative impact on Apple and its sales.

We saw something similar with the iPhone 4′s antenna: Apple engineers cleverly (many would say too cleverly) built the antenna into a metal band surrounding the phone that disguised it and reduced the overall thickness of the device. There wasn’t clear evidence that impacted sales, but it did ding Apple’s reputation.

This time around, Apple is selling lots of phones — it announced 5 million sold the first weekend the iPhone 5 hits stores — but the device went on backorder almost immediately and stayed there. Almost seven weeks after launch, iPhone 5 models are still listed with shipping times of “three to four weeks.” And Apple has not updated us with specific numbers, even at the iPad mini and Mac event two weeks ago, or on the company’s earnings call two days later, on how its most important product continues to fare.

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The Apple Roundup: Images of life as a gadget builder at Foxconn

Erica Ogg — Thu, 18 Oct 2012 17:38:04 +0000

With so many people writing about Apple, finding the best stories and reports isn’t easy. Here’s our daily pick of stories about the company from around the Web that you shouldn’t miss:

The Atlantic‘s James Fallows got insider access to a Foxconn facility in Shenzhen, China this week. He posts pictures inside the facilities and some observations about what life is like for the people who build our iPhones, iPads and laptops.
After losing an appeal, Apple was ordered again to post a public apology to Samsung on its website and in print publications in the U.K. in 14-point type for saying the company’s Galaxy Tab was a rip-off of the iPad. (via Fortune)
Why would Apple want to buy a (mostly) failed company like Color, as has been reported? AllThingsD says Apple actually acquired just a few Color employees, but not its intellectual property, technology or debt. Those who were brought over to Cupertino will be working on cloud technology.
Apple’s former head of retail operations said there would be 25 Apple Stores in China by the end of 2012. That’s not going to happen. However, Apple just announced two more stores to open in the country this year, bringing to the total to eight, according to Bloomberg Businessweek.
Have you seen a flickering on your iPhone 5′s virtual keyboard? AppleInsider tracks the growing number of complaints from users on Apple’s own support forums.

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The Apple Roundup: Apple supplier Foxconn admits hiring underage workers

Erica Ogg — Tue, 16 Oct 2012 15:35:44 +0000

With so many people writing about Apple, finding the best stories and reports isn’t easy. Here’s our daily pick of stories about the company from around the Web that you shouldn’t miss:

The legal working age in China is 16, but Chinese manufacturing giant Foxconn has admitted to hiring interns as young as 14 years old, the company told CNET. While Foxconn has many big consumer electronics customers, Apple is its biggest. Earlier this year Apple contracted the Fair Labor Association to conduct an audit of its suppliers in order to root out illegal hiring practices and working conditions like these.
Adweek profiles Waze, an iOS maps app that is taking advantage of being one of Tim Cook’s recommendations in light of Apple’s own Maps failings. Waze is adding hundreds of thousands of users since that endorsement, and is working to convince users to stay as Google readies its own well-known and well-liked Maps app for iOS.
A teardown of the iPhone 5′s Lightning dock connector reveals a set of mysterious chips inside. They could be related to security, or possibly for conserving power use. (via 9to5Mac)
This seems like a no-brainer, but it looks like Apple will be setting up its EasyPay app — which can be used to make small purchases in Apple stores — to work with Passbook, says AppleInsider.
iFixit has dissected the new iPod nano. If you’re dying to see how Apple gets all those components in such a tiny package, this is the place to look.

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Stricter iPhone 5 quality standards bring worker strike at Foxconn plant

Erica Ogg — Fri, 05 Oct 2012 21:06:04 +0000

Some iPhone 5 production was reportedly halted in one Chinese factory of mega-manufacturer Foxconn on Friday due to a conflict between workers and management. The work stoppage is being called a strike by the China Labor Watch group in a news release. The conflict was apparently related to increasingly strict iPhone build-quality standards that the workers felt they could not meet.

China Labor Watch, an independent group monitoring working conditions in factories in China, said that “multiple iPhone 5 production lines from various factory buildings” came to a halt at the Zhengzhou factory when quality control inspectors on both the day shift and evening shift stopped working. Roughly 3,000 to 4,000 workers were involved, according to the report.

The root of the conflict is being attributed to the workers being forced to work through a holiday without vacation and tighter quality-control standards for Apple’s iPhone that workers felt they could not meet and didn’t have the training for. This reportedly led to physical confrontations between workers and inspectors that resulted in injuries, the labor rights group reported:

Additionally, quality control inspectors fell into to conflicts with workers and were beat up multiple times by workers. Factory management turned a deaf ear to complaints about these conflicts and took no corrective measures. The result of both of these circumstances was a widespread work stoppage on the factory floor among workers and inspectors.

This is the second disturbance at a Foxconn factory in almost two weeks. A riot broke out at a plant in Taiyun that involved several thousand workers, which shut down work for the day. Strikes, conflicts and work stoppages have become increasingly common in the Chinese factories that turn out goods like electronics over recent months as workers have demanded better pay and more humane working conditions.

Apple is just one customer of Foxconn’s but is easily its most important. And this is bad timing for Apple in particular, which is already having some trouble meeting very large demand for the brand new iPhone released in 31 countries over the last two weeks.

Apple did not immediately respond to a request for comment.

Image courtesy of Flickr user secretlondon123

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The Apple Roundup: Verizon, Apple fix iPhone 5 cellular data bug

Erica Ogg — Mon, 01 Oct 2012 15:43:39 +0000

With so many people writing about Apple, finding the best stories and reports isn’t easy. Here’s our daily pick of stories about the company from around the Web that you shouldn’t miss:

A newly released update fixes a particularly pesky bug in the Verizon iPhone 5 that caused the device to use cellular data while on a Wi-Fi connection, according to 9to5Mac.
Tim Cook apologized for Apple’s faulty Maps app last week. But that’s just the beginning of upgrading the maps’ underlying data. Technology Review looks at the amount of work that goes into developing superior mapping data.
Apple updates its supplier report to note that fewer workers in its partner manufacturing facilities are working overtime: 97 percent do not work excessive hours. But, as AppleInsider notes, that’s still not completely in compliance, and thousands of employees building iPhones, iPads and more are still working more hours per week than allowed by Chinese law.
A significant change to iOS 6 is the new App Store layout and search. Techcrunch looks at the biggest changes.
iOS developer Marco Arment examines why the original iPad — released a little over a year and a half ago — isn’t eligible for the iOS 6 update.

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The Apple Roundup: Apple marketing’s war on language

Erica Ogg — Wed, 26 Sep 2012 18:31:57 +0000

With so many people writing about Apple, finding the best stories and reports isn’t easy. Here’s our daily pick of stories about the company from around the Web that you shouldn’t miss:

The new slogan for the iPod touch, “engineered for maximum funness” is riling up linguists. According to the Boston Globe, it’s almost like “Apple’s marketers are working overtime to annoy the loathers of linguistic novelty.”
Google Chairman Eric Schmidt is in Korea to meet with Samsung, according to the Korea Times — reportedly to talk about the ongoing litigation between Samsung and their joint nemesis, Apple.
Gawker interviews an academic expert on Chinese labor to find out whether the Western idea of boycotting Apple products will actually help or hurt the Chinese factory workers building iPhones and other mass-produced gadgets.
While Apple added more accessibility features to iOS 6, some are complaining that the redesigned App Store is actually a step backward for visually impaired customers, according to AppleInsider.
Ars Technica does a detailed comparison of Apple’s new VIP Mail feature and Google’s 2-year-old Priority Inbox and finds (surprise!) they are two “fundamentally different approaches” to email prioritization.

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