Those who follow technology press closely were disappointed to learn that a revamped iPad rumored to launch this fall — possibly a “Pro” model with a Retina Display — is likely not going to become a reality. Apple never made any official mention of the device, of course, so we have no way of knowing whether or not earlier rumors were accurate. What we can seemingly say, however, is that consumers don’t seem to care. Apple continues to sell iPad 2 tablets as fast as its manufacturing partners can ship them, and a new report from Taiwan Economic News on Friday suggests Apple continued to see unprecedented demand so far this quarter. Read on for more. More →
Hon Hai-owned manufacturing giant Foxconn intends to release a portion of its workforce in favor of 1 million new robot workers according to a new report. Xinhua News Agency said on Friday that Hon Hai chairman and founder Terry Gou confirmed the news, seemingly in callous fashion at an employee dance party. The new robots will be used to perform “simple and routine work” such as part assembly and welding. Foxconn currently employs approximately 1.2 million people and also utilizes 10,000 robots. According to the chairman’s reported comments, the number of robot workers will increase to 300,000 next year and 1 million in three years. It is unclear how much of Foxconn’s current workforce will be let go following the introduction of these new robots. Foxconn’s treatment of its workforce has garnered a great amount of attention following a string of employee suicides. More →
Pegatron has been awarded a new contract to build Apple’s next-generation iPad tablets, Taiwan Economic News reports. According to the report, Pegatron underbid Hon Hai for a new contract to manufacture the iPad 3, which will become available some time near the Thanksgiving holiday according to an earlier report. Hon Hai, owner of infamous Apple manufacturing partner Foxconn, manufactures Apple’s current-generation iPad 2 tablet along with a number of other Apple products. Pegatron is seemingly working hard to increase its production share of Apple devices, however; the Taiwan-based manufacturer reportedly also won an order from Apple to manufacture a total of 15 million iPhone 5 handsets. While Apple is shaking up its manufacturing partners according to the report, it will reportedly retain the majority of its component suppliers including TPK Holdings (touch panels), Simplo Technology and Dynapack International Technology (batteries), Largan Precision (camera lenses) and Foxconn Technology (outer casings).
Updated to reflect changes in source report.
An explosion at Foxconn’s iPad manufacturing plant in Chengdu, China last month had a negative impact on the company’s business in May despite initial assurances to the contrary. Foxconn’s revenue last month dipped 2.14% sequentially to NT$200.56 billion, or approximately US$6.95 billion, following production halts tied to the fatal explosion that killed three workers and injured at least 15 more. The tragic accident, caused by the ignition of flammable aluminum dust in a parts polishing workshop, is thought to have cut iPad 2 production by as many as 500,000 units. Foxconn’s revenue in May was still up 23% compared to the same month last year. More →
According to Business Insider, a report from FBR analyst Craig Berger claims that Apple’s goal of producing 40-45 million iPads is “out of reach.” Apple’s current second-quarter production target is 6.2 million iPad units, but that may not be possible due to production issues with Hon Hai, Berger said. As a result, actual iPad production could drop to 5.2 million units during the third quarter. Similarly, Berger argues that Apple may face production issues from the March earthquake in Japan, particularly in relation to touchscreen displays. Berger’s report is on a par with a recent DigiTimes article that suggested Apple would have a hard time manufacturing enough iPhone 4 and iPad 2 units to meet demand due to material and labor shortages at Foxconn. More →
Terry Gou’s Hon Hai Precision Industry Co. is said to have landed an exclusive contract to build Nintendo’s next-generation video game console. According to a report on Wednesday from Taiwan Economic News, Hon Hai could begin shipping the Wii 2 to Nintendo as soon as this coming October. Nintendo’s Wii console had consistently been a best seller for the gaming giant, but interest has finally begun to dwindle as competitive offerings pick up steam despite their age. Nintendo’s Wii 2 is said to be a direct attack the Xbox 360 and PlayStation 3, and it will supposedly feature AMD’s new Radeon R700 GPU for outstanding graphics performance and HD video capabilities. With a rumored retail price between $350 and $450, the console may also be much more expensive than Nintendo’s current Wii console. A Wii 2 that lines up with these rumors would be an interesting move for Nintendo, which has found tremendous success with an inexpensive console aimed at more casual gamers compared to its competitors. More →
DigiTimes is citing a report from sznews.com today that three Foxconn employees have been arrested in Shenzhen, China for leaking the design specs of the iPad 2 to third-party case manufacturers ahead of the device’s launch. The three were allegedly arrested in December of last year and were charged in late March for the leaks. Foxconn grew suspicious of its own employees after accurate third-party iPad 2 cases began popping up on the market; the firm then asked local authorities to investigate. Foxconn manufacturers electronics for a number of major companies including Apple, HP, Palm, and Sony, and it has been called out in the past for the harsh treatment of its employees. More →
Taiwan’s minister of the Counsel of Labor Affairs (CLA) on Thursday announced her intentions to raise the nation’s basic wage for public workers by over 3%. CLA minister Jennifer Wang remarked that despite a 3.47% increase to Taiwan’s basic wage last year, the planned 3% pay hike for public workers should be increased further still. Wang argues that the country’s base pay was too low to begin with, so another 3% hike will not be sufficient for those earning a minimum wage. As of January 1st of this year, basic pay for public workers was increased from NT$17,280 to NT$17,880, or approximately $619 each month. The CLA minister’s comments came following Lawmaker Ho Tsai-feng’s note that the minimum wage should be raised by $2,330 each month, the average increase across all public workers at the currently slated 3% rate. This would bring Taiwan’s monthly minimum wage to NT$20,110, or $696. More →
Reuters is reporting that Apple, Inc. will ship its next generation iPhone — oft referred to as the iPhone 5 — this September. The publication cites three sources “with direct knowledge of the company’s supply chain” and adds that the updated iPhone will sport a “faster processor.” Reuters writes that Largan Precision Co Ltd will be responsible for the new device’s camera sensor, Wintek Corp for its touchscreen panel, and Foxconn Technology Co Ltd for case production. “The companies would begin production either in July or August before shipping components to Hon Hai Precision Industry Co Ltd, flagship of Foxconn Technology Group, for assembly,” the site’s sources state. Analysts and pundits have been utilizing supply-chain checks to try and determine when Apple’s next smartphone will hit store shelves. September of 2011 and January of 2012 have been the two most popular prognostications. The September timeline has been touted by RBC, Avian Securities and Concord Securities in subsequent, independent reports. More →
It’s no wonder why Foxconn is considering moving some facilities outside Taiwan and China and into other countries like Brazil. Beyond the potential tax benefits for the manufacturer and its clients, China and Taiwan are finally beginning to address problems surrounding the working conditions its citizens have endured in recent history. Forced wage increases and other recent moves such as Taipei City’s decision on Tuesday to slash the maximum monthly working hours from 312 to 260 for some laborers threaten to spill over into other regions and industries. For Foxconn and parent company Hon Hai Precision Industry Co. Ltd. — which just revealed March revenue of NT$214.9 billion ($7.39 billion USD), up 41% over February — the financial impact of these moves on the bottom line could be massive. It will be interesting to see how Chinese President Hu Jintao receives Brazilian President Dilma Rousseff as they discuss shifting billions of dollars out of China and into Brazil.
Strong demand in the U.S. means strong revenue in Taiwan, and Hon Hai Precision Industry Co., Ltd., parent company of notorious manufacturer Foxconn, saw revenue continue to climb in February. Hon Hai pulled in NT$152.9 billion (almost $5.2 billion) in the shortest month of the year, Taiwan Economic News reports, up 25.9% over the same month in 2010. Over the first two months of 2011, Hon Hai’s revenues sit at NT$339.1 billion ($11.5 billion), a 31.5% increase over January and February 2010. Growth has slowed, however, as outlined in an earlier report. The company is continuing to increase revenues despite skyrocketing labor and material costs, however, and the growth is attributed to high demand for popular gadgets like Apple’s iPad 2 — which is currently sold out across the country — as well as the original iPad and Microsoft’s motion-based Xbox 360 controller, the Kinect. Sales of the Microsoft Kinect sensor recently passed the 10 million mark, making it the fastest-selling consumer electronics device of all time. More →
Despite ballooning revenues and a record of kick-ass quarterly reports, Apple’s stock has been downgraded from “market outperform” to “market perform” by JMP Securities. The firm said that it made the choice based on the “notable deceleration in [Apple's] primary manufacturing partner Hon Hai (Foxconn) that was emerging even prior to the amplified uncertainty created by developments in Japan.” JMP Securities suggested that Hon Hai’s sales decelerated from 84% year on year in December to 37% in January — then decelerated yet again to 26% in February. As a result, JMP Securities is also dropping its Q2 2011 revenues estimates from $23 billion to $22 billion.
Apple has shifted a major manufacturing contract from Japan-based FOSTER to two Taiwanese companies, Taiwan Economic Times reported earlier this week. Taiwan-based manufacturers Hon Hai and Cheng Uei have been tasked with building the OEM headphones that ship with Apple’s iPhone — a contract likely worth over $300 million. FOSTER loses the business after a stretch as the exclusive manufacturer of Apple’s iPhone headphones, and the job will now be split between two Taiwanese companies. Cheng Uei will build the cords, speakers and control switches while Hon Hai will insert the wires and assemble the earbuds. Cheng Uei also manufacturers the chargers that ship with Apple’s iPad, and is in the process of expanding its facilities to increase output. More →