Electronic enthusiasts eight o'clock early: Apple's every move, affecting Foxconn, happiness is also a crisis.
On April 6, Taiwanese media DIGITIMES reported that the official launch date of Apple's next-generation iPhone 8 is likely to be postponed until October, or even November. In the past few years, Apple has habitually chosen to release a new generation of iPhones in early September each year.
It is reported that the reason for the delay is mainly the changes in the appearance and function of the iPhone, which has caused Apple to encounter technical problems. The lamination process of its curved OLED panel still needs to be perfected. At the same time, the use of 3D sensing front camera will bring some technical challenges.
In this regard, Apple China related people in an interview with the 21st Century Business Herald said that it is not convenient to disclose information related to the new product.
However, as Apple's largest supplier, Foxconn's performance may be dragged down again. The company’s 2016 financial report showed that its revenue declined for the first time last year due to the impact of Apple. At the same time, because of the strong demand for iPhone 7, Foxconn's net profit in the fourth quarter of last year has increased significantly, up nearly 30% year-on-year.
In an interview with 21st Century Business Herald, independent IT industry observer Wang Ruchen believes that although Foxconn has tried to dilute the influence of Apple in the past two years, it has also expanded into industrial products in addition to OEM mobile phones, whether it is acquiring Sharp or participating in the acquisition of Toshiba. Storage business is to transform and build their own brand. However, the transition has a cycle that takes time, and it is still a glorious relationship with Apple.
Mobile phone bonus to the end
In October last year, Apple reported that its financial report for the third quarter of last year was $215.6 billion, the first year-on-year decline since 2001. In the third quarter of last year, not only the hardware sales of iPhone and other products fell, but also Greater China. District sales fell 30% from the same period last year.
However, due to the strong sales performance of the iPhone 7 listed in September, Apple's revenue and profit began to pick up in the first quarter of last year, ending the decline in revenue for three consecutive quarters.
At the same time, Foxconn's performance almost drawn the same curve. Due to the decline in iPhone sales, the company’s revenue has been negative for the first time since its listing. Its annual revenue was approximately $143.6 billion, down 2.8% year-on-year. Net profit was approximately $4.9 billion, up only 1.2% year-on-year.
In addition to being affected by Apple, Foxconn faces other problems in the future of the mobile phone industry. On May 18, 2016, Microsoft transferred Nokia brand, feature phone software, services, etc. to Foxconn. Foxconn has stated that it will leverage the Nokia brand and certain intellectual property rights and work together on technology, manufacturing, supply chain and research and development activities to strengthen the company's overall business capabilities in design, manufacturing, logistics and distribution.
The vision is, after all, a vision, and Nokia has not caused repercussions in the domestic market. On April 5, Foxconn's subsidiary, Fu Zhikang, announced that it expects its performance loss to be about $110 million as of June this year.
The company disclosed in the announcement that in addition to the cost and operation losses incurred by the acquisition of Nokia, the smartphone market is highly competitive, and the market share of the Group's major customers' international brands has fallen sharply. A number of customers have changed their outsourcing strategies through restructuring and self-production, cutting back on the outsourcing business previously established with the group, which directly hit the company's sales.
The saturation of the mobile phone market seems to be the bottleneck facing the entire industry. Wang Ruchen said that business revenue from Apple accounted for more than 50% of Foxconn's total revenue. Although Apple is still the number one brand in the market, it will not give up its cooperation with Foxconn. However, the growth of the demographic dividend in the mobile phone industry is close to the ceiling. Apple will choose more partners in terms of safety and cost. Master is one of them. "Foxconn's sense of crisis is still very strong, and accelerating transformation is also an inevitable choice."
Broaden industrial layout
This year is the tenth year of the birth of the iPhone. At this special point, Apple may launch a very innovative product, which will trigger a consumer boom.
Citigroup analyst William Yang predicts that Apple and Foxconn's business will recover this year, and iPhone shipments may climb to 221 million units. Compared with the first half of 2017, Foxconn's revenue in the second half of this year will increase by up to 43%, due to Apple's upcoming iPhone 8 in the second half of the year.
However, Foxconn is no longer just willing to be a founder, but is trying to transform and move toward new manufacturing and industrial upgrading. In August last year, in order to obtain the OLED technology reserves and resources of the Japanese display brand Sharp, Foxconn acquired Sharp for $3.8 billion. However, the acquisition of Sharp, which has a debt of 10 billion US dollars, has also dragged down Foxconn’s finances. Foxconn’s third-quarter net profit fell 8.7% year-on-year.
Foxconn's determination to enter the consumer brand is evident. At present, Foxconn has begun to operate the Sharp TV business, and Sharp Mobile has recently announced that it will return.
Historically, Foxconn has also launched its own TV and mobile phone brands, and invested in the introduction of the city of Wonder City. However, in the past few years, the projects that have been tried have been reverberating, and the products have finally disappeared from the market.
No matter how much Foxconn hopes to get rid of the label of "Apple OEM", it is undeniable that Apple's orders have also laid the industry's first position. When Apple's scenery is no longer, how Foxconn will break through and find new breakthroughs will become a difficult problem for this huge manufacturing empire.
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