Plans for iPhone assembler Foxconn to acquire Sharp, allowing it to move into making displays for future devices, now appear in significant doubt. Initially reported in Japan as a done deal, the WSJ quickly reported that Foxconn was “delaying” signing – and the same source today reports that talks have broken down.
Sharp Corp on Friday scrambled to salvage a sale to Taiwanese electronics assembler Foxconn as its stock plunged and investors questioned whether the companies could restore trust to make their proposed marriage work after an 11th-hour breakdown in talks …
Update: Foxconn has denied the Reuters report, stating that the claim is “completely inaccurate and totally without foundation.” The company told us that increased automation will result in reduced recruitment, but that there are no plans to reduce its workforce “now or anytime in the future.”
Foxconn, the lead assembler for iPhones, is planning to cut its workforce despite widespread expectations that Apple will today announce record sales of its smartphones, reports Reuters. It’s likely that the proposed reduction in staffing relates to Foxconn’s work for other manufacturers, who account for around 60% of the company’s revenues. Also, Apple sells a lot more stuff during the run up to the holidays so seasonal workers might be let go after demand is met.
Special assistant to the chairman and group spokesman Louis Woo did not specify a timeframe or target for the reduction, but noted that labor costs had more than doubled since 2010 […]
“We’ve basically stabilized (our workforce) in the last three years,” Woo said. When asked if the company plans to reduce overall headcount, he responded “yes”.
Foxconn experienced double-digit revenue growth from 2003 to 2012, but has seen that growth slip in the past couple of months as the PC market contracts and smartphone growth rates slow. The company has been trying to work its way up the Apple food-chain from assembly and low-cost components into more expensive parts like displays.
iPhone assembler Foxconn is apparently hoping to move beyond its relatively low-margin work into more profitable high-end component manufacturing in order to take a bigger slice of revenue from Apple, reports the WSJ.
Apple Inc.’s major assembler Foxconn is in preliminary discussions with a provincial government in northern China for an investment in a new factory that would make high-end screens for iPhones and other mobile devices, people familiar with the talks say.
Foxconn already manufactures some iPhone components, but currently only low-margin ones like metal casings and cables … Expand Expanding Close
In what would be a rather amusing twist, future iPhones could be built by Google robots as Google’s robotics division assists Foxconn to “speed up robot deployment” at its factories.
The WSJ reports that Foxconn was looking for assistance in automating its production lines, while Google is aiming to introduce robots to manufacturing processes that have so far been largely manual – electronics assembly being a key example. It takes around 600 people to make each iPhone.
Foxconn has been working with former Android executive Andy Rubin since last year to carry out the U.S. company’s vision for robotics.
To speed up robot deployment at its own factories, Foxconn Chairman Terry Gou met with Rubin in Taipei recently and they discussed new robotic technologies, they said.
At the meeting, Gou expressed excitement over new automation technologies demonstrated by Rubin, they said. Rubin also asked Gou to help integrate a technology company that Google is acquiringas Foxconn’s strength lies in mechanical engineering.
Google has acquired eight robotics companies over the course of the past year, and is believed to have ambitions to create a robotic operating system that would be to manufacturing what Android is to smartphones. Foxconn is looking to reduce operating costs and boost efficiency.
“Foxconn needs Google’s help to step up automation at its factories as the company has the lowest sales per employee among the contract makers, given its large workforce,” said Wanli Wang, an analyst at CIMB Securities.
Last week, a report from The Wall Street Journal claimed Apple’s much rumored HDTV set is now in the “early stages of testing” with partners Hon Hai Precision and Sharp. Today, we get more details surrounding the rumored product from the Taiwan national news agency’s English language Focus Taiwan. According to the report, citing sources close to Hon Hai Precision Industry Co., the supplier is testing Apple television designs, but the possibility of the product shipping in 2013 is “unlikely”:
Nevertheless, the source said it is unlikely that shipments of the appliances will begin as soon as the end of next year.
While the report from WSJ claimed Sharp was involved in the initial testing of the product with Hon Hai, Focus Taiwan’s source claimed the possibility of Sharp displaying panels for the product is “not high”:
Asked whether the new Apple TV will use display panels produced by Japan’s Sharp Corp., the source said the possibility is not high.
The source also claimed that Apple is looking at displays ranging from 46 inches to 55 inches, meaning the company likely wouldn’t rely on Sharp’s plants best suited for production of 60+ inch panels: Expand Expanding Close
First noticed by game developer CMA Megacorp, the iPhone 5 appears to react differently than previous generations of the device when sliding a finger diagonally across the screen in quick succession. The average user might not notice the glitch, but the issue could be a problem for game developers that rely on quick diagonal scrolling and swiping motions. As highlighted by Recombu in the video above, “the problem is exacerbated by scrolling diagonally and as you can see only occurs on the iPhone 5.” In the video, we see the theory put to the test on two iPhone 4Ss and two iPhone 5s, one of each running iOS 6.0 and 6.0.1, indicating the issue might indeed be hardware related.
According to a report from Reuters, citing a statement from Foxconn Chairman Terry Gou, Apple’s assembler is having a hard time keeping up with iPhone 5 demand. Gou confirmed previous rumors that the company is indeed “falling short” of meeting supply for iPhones and its other unit, Foxconn International Holdings, is assisting with production:
“It’s not easy to make the iPhones. We are falling short of meeting the huge demand,” Foxconn Chairman Terry Gou told reporters after a business forum.
Following the launch of the iPhone 5, reports claimed employees at Foxconn’s Zhengzhou plant went on strike over quality control concerns and lack of training. The same quality control issues were linked to scratching found out of the box on some iPhone 5 units, but it’s unclear how much these setbacks have contributed to iPhone 5 delays. Another unnamed executive speaking to The Wall Street Journal last month said the iPhone 5 is “the most difficult device that Foxconn has ever assembled. To make it light and thin, the design is very complicated.”
To speed up production of new iPhones, specifically the production of display components, Reuters suggested Apple could provide cash incentives to Sharp, one of its keep suppliers that was thought to have contributed to initial low supplies. Following rumors yesterday that Apple might even be considering making further investments in the failing company, Asymco’s Horace Dediu (via Fortune) speculated today that a $2.3 billion discrepancy in Apple’s 2012 financials might have already went to Sharp: Expand Expanding Close
As noted by InsideFacebook, Facebook recently picked up former Apple employee Chris Weeldreyer as its new product design manager. Weeldreyer previously worked as the UI Design Manager at Apple for over eight years since joining the company in November 2003. According to his Facebook page, he officially started his new role at Facebook on June 18, 2012.
In May, the New York Times reported Facebook “has already hired more than half a dozen former Apple software and hardware engineers who worked on the iPhone”and tied it the old Facebook phone rumor.
As for Weeldryer’s work at Apple, he certainly worked on at least iWeb. He is listed as an inventor on several Apple Inc.-filed patents including iWeb for iPad, multi-touch and gesture-related inventions, as well as a number of security related patents. Weeldryer’s LinkedIn lists his specialties as: industrial design, interaction design, user interface design.
According to several local reports, Foxconn’s Terry Gou made some pretty bold statements at Hon Hai Precision’s annual meeting of shareholders on Monday. While there are a few translations, all seem to claim Gou urged customers to wait for the iPhone 5, “saying that the new model will put Samsung’s Galaxy III to shame.” A report from Focus Taiwan quoted China Times:
Gou said he has made it a lifetime goal to defeat Samsung — “a company with a track record of snitching on its competitors.”… He was referring to Samsung’s action in 2010 of snitching on four Taiwanese companies in an investigation by the European Commission on price-fixing in the flat panel industry…Samsung was exempted from the investigation by serving as a “tainted witness.” … Gou also urged consumers to wait for the launch of Apple’s iPhone 5, saying that the new model will put Samsung’s Galaxy III to shame.
Gou also apparently claimed that Foxconn’s Sakai plant “has an exclusive agreement with Corning Inc., an American manufacturer of glass, on large panel supply,” and his “competitors will not be able to secure any such material if they wished to.” We are going to wait to see if Foxconn issues a statement regarding these quotes, because we know a couple of stories in recent months misquoted Gou… Expand Expanding Close
Update: Russian speaking reader Ilya Kuchinskiy informed us that Izvestia is indeed a respected news source, but like we anticipated, the translation is erroneous. Literally it means “Skolkovo has some plans find investors and has invited to come and work in skolkovo. They have some talks to work but there is no plans to open Apple center in Russia, it is like thay just send invitation and google, facebook, apple just thinking, that’s it
According to a translated report from Russian publication Izvestia (via MacRumors), Apple is one of a handful of tech companies, including Google and Facebook, in talks to open a research facility at the Skolkovo Innovation center near Moscow, Russia. We will have to take this report for what it is; we are skeptical given a long line of rumors this week that came mostly from poorly translated reports that were all later debunked. First, we heard rumors about Apple acquiring German TV manufacturer Loewe, which was debunked later, and then China Daily misquoted Foxconn’s Terry Gou. Finally, Apple allegedly ordered “huge” numbers of flexible displays from Samsung for the next iPhone—debunked. We are hoping for a follow-up from an additional source. If you are in the area, hit us on tips@9to5mac.com.
Update May 16, 2012: German publication Handelsblatt (via Bloomberg) quoted Chief Executive Officer Oliver Seidl of German TV manufacturer Loewe as saying the company has had “no contact” with Apple regarding an acquisition.
Less than a month after posting a false claim about Apple’s CEO Tim Cook visiting the Valve HQ, ole’ Danny Dilger claimed this weekend that Apple is moving to acquire a German TV manufacturer called “Loewe.” Again, we did not run with the story, because we preferred to mock it instead via Twitter. Not only has that story been debunked, but more allegations about Foxconn’s CEO Terry Gou having confirmed an Apple television are now being denied by the company. Oh, and Digitimes’ track record…
A Foxconn executive allegedly claimed that his company is “making preparations” for an Apple television, but development and manufacturing has not begun. English-language daily newspaper China Daily(via How To Arena) quoted, well, summarized Foxconn Chairman Terry Gou on Friday:
Gou said Foxconn is making preparations for iTV, Apple Inc’s rumored upcoming high-definition television, although development or manufacturing has yet to begin.
iTV reportedly features an aluminum construction, Siri, and FaceTime video calling […]
Foxconn’s recent 50-50 joint venture factory with Sharp in Japan is one of the preparations made for the new device, Gou added.
The report refers to the device as “iTV,” which is a common name circulating for the Apple television set. Despite no official confirmation from Apple, rumors persist that the product is edging closer and could feature a host of appealing characteristics, such as the ones mentioned in the excerpt above.
Apple plans to improve work conditions at its iPhone and iPad-assembling Chinese factories, and Foxconn executives announced today that it would share the initial price of that venture with the Cupertino, Calif.-based Company. According to Reuters:
Foxconn chief Terry Gou did not give a figure for the costs, but the group has been spending heavily to fight a perception its vast plants in China are sweatshops with poor conditions for its million-strong labor force. It regards the criticism as unfair.
‘We’ve discovered that this (improving factory conditions) is not a cost. It is a competitive strength,’ Gou told reporters on Thursday after the ground-breaking ceremony for a new China headquarters in Shanghai.
‘I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs.’
It was unclear if the split would be 50/50 or in some other ratio.
Apple and Foxconn began bettering conditions for workers earlier this year by raising wages in mid-February from 16 percent to 25 percent, and then they hired thousands of new laborers the next month to reduce overtime in the factories.
Interesting that Hon Hai Precision Industry, better known as Foxconn, issued a statement regarding Steve Jobs’ resignation from his CEO post at Apple. The Asian company wrote in a short email statement to Bloomberg:
Foxconn wishes Steve Jobs will get well. We think Tim Cook has shown good work as stand- in CEO during Jobs’s absences and expect Apple will perform well in the future. The relationship between Cook and Foxconn has been very close and we expect that the relationship will become even closer in future.
Asian companies are traditionally tight-lipped and shy away from commenting on their partners’ business dealings so it’s a bit surprising Foxconn would put out a statement, let alone touch on the subject of Steve Jobs well-being. On the other hand, Foxconn is Apple’s largest contract manufacturer and as such has been instrumental in ramping up manufacturing to meet the growing demand for Apple’s gadgets around the globe. Expand Expanding Close
Foxconn’s founder and chariman Terry Gou said the company will replace an unspecified amount workers with one million robots in three years. Foxconn is the Asian manufacturer that is responsible for many components inside of Apple, Sony, and Nokia’s devices. Currently, the company has 10,000 robots and will expand to 300,000 next year, gradually opening the door to a total of one million robots in three years.
One interesting aspect of a robotized workforce is that it makes places with more expensive workers more competitive.
The robots will be used to accomplish basic tasks like spraying, wielding, and assembling. Foxconn currently employs 1.2 million people, therefore one million robots could potentially be a big hit on employment in China. Expand Expanding Close
The WSJreports on the next generation iPhone due this fall:
According to some suppliers of components to Apple, the new version of the iPhone is expected to be thinner and lighter than the iPhone 4 and sport an 8-megapixel camera. One person said the new iPhone will operate on Qualcomm Inc.’s wireless baseband chips. The current iPhone 4 uses memory chips made by Samsung Electronics Co. and baseband chips from German chip maker Infineon Technologies AG, according to a report by market-research firm iSuppli Corp.
Verizon execs have already said the next iPhone will be a GSM/CDMA world phone – which means it is likely that it will use Qualcomm’s Gobi chips (As the current Verizon iPhone and iPad currently do). Numerous reports have also said it will contain a 8megapixel camera – from Sony and other manufacturers.
There is some question about whether or not these devices will meet production deadlines, however…
Originally planned for late July, the Brazilian Minister of Science and Technology, Aloizio Mercadante told Globo that iPad production would being in Brazil later this Fall at Foxconn’s new plant outside of São Paulo. Roughly machine translated:
“The handle access to the company, which would be used to drain the production plant in Jundiaí (SP), was not ready in time, due to construction delays.In addition, there is a shortage of skilled labor in the country.The company has hired 175 engineers, who had to send them to China where they are doing stage.The company, however, need more than 200 engineers to the sector, “said the minister.
One reason for the additional factories? A 40% reduction in consumer costs, according to the post. Not because the iPad is cheaper to make (though it could be) but the government won’t levy taxes on domestically produced products.
