HonHaiPrecision
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7-Eleven strikes deal with Hon Hai to sell tablets and notebooks in Taiwan
The stars have aligned in such a way that two of our favorite, yet disparate interests are crossing paths: gadgets and Slurpees. Hon Hai Precision Industry (better known as Foxconn's parent company) has struck a deal with 7-Eleven, and will manufacture slates for the latter to sell in Taiwan. Details are slim on the 7-inch (7.11-inch?) tablet, but it's now up for pre-order, and the pair hope to give 3,000 units new homes in the first three months of sales. As absurd as it sounds, this isn't the first partnership between the unlikely couple. In June, a similar deal resulted in 7-Eleven-branded TVs (in 40-, 60- and 70-inch flavors), and over 15,000 have been sold since. Now, a 50-inch set has been added to the mix, and between five and ten new products -- which include smartphones and laptops -- will be available by years' end. Rather than crowding the inside of shops with the gadgets, the televisions were up for order through the convenience store's 7net website as well as brick and mortar locations, and it appears the other hardware will follow suit. We don't expect the gas station to dabble in electronics stateside, so you might as well make the most of a trip to Taiwan and pick up a Honey Lemon Slurpee while you're at it. [Image credit: Nicky Fernandes, Flickr]
Google Glass will reportedly be built in America, at least initially
That $1,500 price tag for Google Glass Explorer Edition? Perhaps it makes a bit more sense considering that US labor will be used to manufacturer it. According to unnamed sources cited by Financial Times, the first run of production-quality Glass headsets will be built in Santa Clara, California. The reason? A lot is riding on the quality of Glass, and it's likely that Google just wants to keep a close eye on every single prototype that leaves the lab. In fact, it's not exactly uncommon -- the outfit did the same for its ill-fated Nexus Q, and Apple is building some of its iMacs here in the states as well. It's also important to note that the initial batch of Glass headsets won't be high yield, so there's little reason for Google to look overseas with so few units slated for production. Whether or not the lines in NorCal will continue to hum once these things hit critical mass remains to be seen, but it is interesting that Hon Hai Precision (read: Foxconn) will reportedly manage the facility that cranks 'em out.
Hon Hai shows record profits, keeps making money from making iPhones
Hon Hai Precision, also known as Foxconn Technology, has reported its earnings for the year and notched a net income of $3.2 billion according to the Financial Times. Most familiar as the manufacturing muscle behind Apple's iPhones, iPads and the like, the Taiwan-based manufacturer beat analyst predictions on high margins for those products. Its subsidiary, Foxconn International Holdings, is the world's largest cellphone maker and produces devices for companies including Nokia and Motorola, but suffered a net loss of $316.4 million. As a result, some are concerned about Foxconn's heavy reliance on Apple as a customer going forward. Still, the company is reportedly continuing a plan to increase vertical integration, by manufacturing the parts for devices and not just putting them together -- we'll see if anyone notices changes in the final product anytime soon.
Foxconn buys 9 percent stake in GoPro for $200 million
Hon Hai Precision, better known as Foxconn, is already the world's largest electronics manufacturer. Chances are if you've got a laptop, console or smartphone it was assembled in one of the company's many Chinese factories. The giant has also gotten quite cozy with Sharp, with an eye towards investing directly in the LCD market, though no deal has been made official. Now the company is dipping its toes in the camera business, by purchasing an 8.88-percent stake in GoPro for $200 million. GoPro is best known for its rugged shooters used by shows like MythBusters, oh, and the Engadget Show! There's not many details to report at the moment but, if you're curious, there's PR awaiting you after the break.
Foxconn announces $226 million half-year net loss, blames usual suspects
Manufacturing behemoth Foxconn (Hon Hai) has announced a record net loss of $226 million on turnover of $2 billion for the first half of the year. Unsurprisingly, it attributed the loss to the European debt crisis, global economic slowdown and its customers "continuous struggle" for market share. While it made a big push to encourage new customers, capacity far outstripped demand. In order to stem the tide, it's relocating some of its Shenzhen-based facilities to sites in Northern China -- and it's also in talks with carriers to become an ODM, building white-label smartphones in the same way that Huawei and ZTE do. While the loss isn't a rosy picture, the company does have nearly $2 billion stashed in the bank, so it shouldn't be worrying too much.
Foxconn investment in Sharp looking less likely due to LCD manufacturer's shrinking stock value
Foxconn's parent, Hon Hai Precision Industry, partnered up with Sharp earlier this year, taking a stake in Sharp's Sakai LCD manufacturing plant and investing another $850 million in the company. Unfortunately, that latter investment deal is in danger of dissolving due to Sharp's financial troubles. The Wall Street Journal reports that Sharp's shares have fallen enough in the months since the aforementioned agreement was consummated in March -- due to flagging sales and excess inventory -- that Sharp's given Hon Hai the option to back out of the deal. However, Hon Hai's still interested in buying ten percent of the Japanese company, and has expressed an interest in renegotiating the terms of the investment. So, it seems we'll have to wait and see if Sharp accepts Hon Hai's continued advances, but you can read more about the company's financial woes right now at the source below.
Sharp reportedly getting cozy with Hon Hai Precision, helping to make phone and tablet LCDs in Chengdu
If we believe Japan's Nikkei, the decision by Hon Hai Precision Industry (that is, Foxconn's daddy) to buy a stake in Sharp was really just the start of a long, torrid love affair in LCD production. While Hon Hai is getting the rosy side of the deal for Sharp's TV-oriented Sakai plant, it's now thought to be paying Sharp for display technology that would go into a new factory in Chengdu for small- and medium-sized LCDs used for smartphones and tablets. If all dovetails as nicely as the two would like, the joint venture would see advanced mobile displays manufactured on the cheap -- the best of both worlds. Suffice it to say that there's a few companies that might be interested, as clients like Apple are no strangers to Chengdu. Before you let visions of IGZO-based LCDs on every iPad and iPhone dance through your head, though, remember that neither Hon Hai nor Sharp has confirmed anything -- and that the plant wouldn't be up and running until 2013 at the earliest, even if everything's in sync.
Report: Foxconn spending $210 million on Apple production line
China Daily is claiming that Foxconn will pump $210 million into building a production line in China's Jiangsu province. Local authorities have stated that the plant in Huai'an city will produce components for Apple, no doubt heralding a raft of rampant speculation as to Cupertino's intentions. The building will occupy 40,000 square meters, produce $1.1 billion worth of gear per year and require 35,800 employees -- more than Nokia and Sony have fired in recent months, combined.
Sharp posts $1.4 billion extraordinary loss, refocuses on mobile displays
Sharp has reported an extraordinary loss of 117.1 billion yen ($1.4 billion) for the financial year ending March 2012. The company has cited restructuring costs and inventory losses as the causes for the write-down, but also projected that its TV business would lose a further 18.7 percent of its projected sales in the current year. The company has decided to convert some of its big-screen LCD production lines into mobile LCDs as it tries to reassert its dwindling display business. It's yet more bad news after the company sold part of its LCD manufacturing business to Hon Hai, Sony withdrew from a joint venture and refused to deal with Sharp in the future, plus an 86 percent collapse in profits.
Sony and Sharp joint venture hits a rocky patch, Sony cuts off capital
When Sharp sold off some of its LCD manufacturing business to Hon Hai Precision we knew the company had fallen on tough times, we just didn't realize how bad things truly were. That joint venture it formed with Sony, well, it's all but over at this point. The two companies have amended their deal with each other and Sony has decided not to inject any more capital into the project. That's not entirely surprising since the relationship was already starting to show signs of strain, but the partnership could crumble at any moment. A study period has been designated, through the end of September, to decide what the future holds for the two regarding the production and purchase of large panel LCDs, but at any time Sony can simply demand that Sharp buy back its shares and leave the venture. For Sharp's sake, we certainly hope Hon Hai is in this for the long haul. Check out the legalese stuffed PR after the break.
Hon Hai Precision snaps up 10 percent of Sharp in display tie-up
For those unaware, going at it alone in the cutthroat display business isn't exactly a recommended business approach. To wit, Sharp -- once a mainstay in the LCD industry -- has just sold an approximate 10 percent stake of itself to Taiwan's Hon Hai Group. Sharp will be issuing new shares worth $808 million to Hon Hai Precision Industry Co., and we're told that it'll go down as the largest investment ever in a Japanese company by a Taiwanese one. Moreover, Hon Hai will grab half of Sharp's 92.96 percent stake in its LCD panel factory in Sakai, Japan. Though it may not be obvious, seeing Sharp accept this fate is hugely symbolic, and it's happening just as the company gets ready to eat "multibillion-dollar losses" for this fiscal year -- which just so happens to be the 100th anniversary of its founding. Sharp executive managing officer Takashi Okuda said this during a news conference in Tokyo: "We have tried to do everything by ourselves, but the environment is tough." Here's hoping for a better tomorrow, though.
Hon Hai sees profit fall nine percent in Q3, pins hopes on new Chinese factories
Hon Hai Precision Holdings has just released its Q3 earnings report, and it probably did so with a whimper. That's because net profits fell to NT$19.2 billion (about $614 million) this quarter, marking an 8.6 percent decline from Q3 2010, when Hon Hai (aka Foxconn) reported a net income of NT$21 billion (around $702 million). The company blamed the decline on a slow economic recovery and its ongoing expansion in China, where new factories are being constructed across inland areas like Chengdu, Wuhan and Zhengzhou. These costs are still taking a toll on Hon Hai's bottom line, though analysts say the expansion could pay off in the long-run, thanks to the lower wages that Hon Hai will have to pay to maintain operations in these less affluent regions. Some are also hopeful that the iPhone 4S will help spur production heading into Q4 of this year, though its ultimate effect, of course, remains to be seen. Hit up the links below for more details and analysis.
Report: Foxconn's Brazil factory ready for business, will begin shipping iPads in December
It appears that Apple is about to expand its manufacturing operations to Brazil, where a new Foxconn factory is already in place and ready to churn out iPads, according to a report from national media outlet UOL. Aolizio Mercadante, the country's minister of science and technology, confirmed the news this week during a hearing held by the Commission of Economic Affairs. "At first many doubted, but it will be the first time that [Apple] will produce iPads outside Chinese territory," Mercadente said. "We are taking a big step for digital inclusion in the country." Located in Jundiaí, the new facility was constructed under a joint venture between Foxconn and the Brazilian government, with the former reportedly contributing $12 million to the initiative. Rumors of a South American expansion began circulating earlier this year, with many expecting Foxconn's Brazil-based operations to get underway during Q1 of 2012, according to DigiTimes. Construction, however, appears to have wrapped up ahead of schedule, with Mercadante claiming that iPad shipments will begin in December. Apple, for its part, has not commented on the report.
Foxconn posts $943 million net profit for first half of 2011, 20 million iPad 2s coming for Q3?
It looks like 2011 is shaping up to be a solid year for Foxconn. Earlier this week, the hardware manufacturer announced net profits of NT$27.38 billion (about $943.72 million) for the first half of this year, just a few months after posting a disappointing $218 million loss for all of 2010. These figures, however, are down about 21 percent from the first six months of last year, when Foxconn (AKA Hon Hai Precision) reported net profits of NT$34.74 billion (around $1.2 billion). In a statement, Hon Hai said its first semester results were "as expected and remain seasonal," considering today's harsh and uncertain financial climate. DigiTimes, meanwhile, is reporting that the electronics maker is "expected" to ship a full 20 million new iPad 2s during the third quarter of this year, though the Taiwan-based news outlet didn't offer much in the way of explanation or sourcing.
Foxconn owner reports revenue up thanks to iPad 2, other devices
Hon Hai Precision, the parent company of Foxconn, recorded an impressive revenue increase in its latest earnings report thanks to the iPad 2, the original iPad and the Kinect. According to the Taiwan Economic News, the manufacturing company reported revenue of NT$152.878 billion (about US$5.2 billion) in February 2011, up 25.81 percent year over year. This increase in revenue may offset some concerns over the slowed growth of the company. The iPad 2 has been immensely successful since its debut last week. Long lines characterized the launch, and Apple sold an estimated half million devices in the first weekend of sales. The iPad 2 is difficult to find in retail stores here in the US, and its online ship date is pushed out 4-5 weeks. [Via Boy Genius Report]
BusinessWeek profiles Foxconn founder (and veritable pitbull) Terry Gou
As you might imagine, becoming the dominant player in electronics component manufacturing in China -- particularly at a time when competition has never been fiercer -- takes a particular personality type, and after reading BusinessWeek's profile of Foxconn founder Terry Gou, you get a very real sense that the dude meets the criteria. His reaction to this year's factory suicide controversy is a bit unusual; he basically comes out and says that he didn't worry about the first few before realizing that he needed to make some changes somewhere around the fifth death, but given that he says he's been living in his office for a while now and eating three meals at his desk trying to make things right, it sounds like he's finally on top of it. The story of Foxconn's stratospheric rise is an interesting one, starting with its early coup making components for the Atari 2600 leading through to its purchase of 1,000 Fanuc milling robots generally reserved for prototyping -- valued at $20,000 apiece -- that it needed to buy to secure Apple's iPhone 4 contract. Gou envisions a fully-automated (and presumably almost employee-free) component factory inside of five years, has qualms about expanding his manufacturing presence in America ("I don't want to spend time having people sue me every day"), and pays executive bonuses out of his own dividends to protect the company's bottom line... so yeah, he's quite the industrialist. Follow the link for the fascinating full profile.
Foxconn makes designs on the Chinese retail market, gives laborers $25,000 to start stores
Three months ago, the compensation of Chinese laborers was low enough that those who built an iPhone couldn't dream of buying one, but the spending power of China in general has increased enough that electronics giant Foxconn (aka Hon Hai Precision Industries) is actually planning to sell such goods in those laborers' home country. The Wall Street Journal reports that the company will open ten large electronics stores in Shanghai by the end of 2011, and extend its existing chains of smaller retail stores and booths around the country by about 50 and 200 respectively. The plans aren't all focused on middle- and upper-class Chinese, as they provide provision for those aforementioned laborers as well -- on top of several recent wage increases, Foxconn would reportedly provide $25,000 to employees to help start up electronics stores in their hometowns. We wonder how many iPads a laborer would have to sell to afford one of their own.
Chinese government to make Foxconn suicide findings public
We've been struggling to wrap our heads 'round this whole Foxconn imbroglio since the beginning, and while we're pretty skeptical about any official reports we'd be remiss if we didn't mention that the Human Resources and Social Security Ministry in China was looking into the thing, and that they'll be releasing the findings somewhat soonish. According to Vice Minister Zhang Xiaojian, recent strikes at various factories including Brother and Honda (strikes seemingly sparked by the Foxconn incidents) do not constitute "a 'wave' of unrest." Well, that's good -- for business owners, at least. And while the families of the Foxconn suicides maintain that long hours, low pay, and harsh management are to be blamed, Zhang added that "the psychological problems of the workers" can be added to the list. Psychological problems caused by low pay, long hours, and harsh management, perhaps? [Thanks, Xinh]
Foxconn axes suicide compensation, relocating some production to Vietnam or Taiwan
At yesterday's annual shareholder meeting, Foxconn revealed that it'll no longer be compensating families of dead employees as a move to discourage further suicides. CEO Terry Gou reasoned by exhibiting evidence that showed the money -- an amount almost equivalent to ten years' worth of salary -- was a major motivation for the suicides. One such exhibit was a man's suicide letter that contained the following message for his parents: "...now I'm going to jump off Foxconn, really leaving now, but you don't have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now." Gou also blamed a possible "Werther Effect" created by the news coverage, which might have led to six of the twelve suicides all taking place in May. Consequently, the company will be handing over its welfare management work to the local Chinese government, as it's unable to deal with too many social responsibilities. In the same meeting, the company made an unsurprising announcement that it's looking to relocate some manufacturing work, amid a worsened earnings forecast due to increased wages -- basic salary has gone up from ¥900 ($132) to ¥1,200 ($176), rising to as much as ¥2,000 ($293) for those who meet new performance criteria. This will involve setting up a fully automated facility in either Taiwan or Vietnam, while the existing Vietnamese plant will be receiving more orders. Chairman Samuel Chen also said that Foxconn will be working with its clients to share the load -- no further details on this, but we suspect Apple's rumored direct subsidies are part of the plan.
Foxconn offers additional 66 percent raise, pending mysterious performance review
Though working conditions at Hon Hai Precision Industry may or may not have improved since Foxconn CEO Terry Gou showed off the pool, pay most certainly has. Where workers once made 900 yuan (about $132) per month, Reuters reports that should workers pass a three-month review, they could pull in 2,000 yuan ($293) in the same period. However, Foxconn's not saying what would qualify an individual for the review. Even should they not pass, wages will be 30 percent higher than before the company's labor scandals were brought to light, and before a string of twelve laborers reportedly committed suicide.
