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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 realizes record $3.2 billion profit for 2012
The success of the iPhone 5 and three new iPad models in 2012 not only raised Apple's profits to record levels, but has also helped manufacturer Foxconn to reach a all-time high $3.2 billion profit ($3.9 trillion New Taiwan dollars) during the year. Foxconn, the trade name for Hon Hai Precision Industry Co., assembles many of Apple's products in Chinese manufacturing plants. While Apple also works with some other manufacturing firms such as Pegatron and is moving some limited manufacturing capability back to the United States, the majority of Apple products are built in Foxconn plants. Foxconn also recently announced that the company is adding 5,000 new jobs, primarily R&D personnel who will be working on automated production, robotics, and e-commerce.
MIT imaging chip creates natural-looking flash photos
Mobile image processing in itself isn't special when even high dynamic range shooting is virtually instant, at least with NVIDIA's new Tegras. A new low-power MIT chip, however, may prove its worth by being a jack of all trades that works faster than software. It can apply HDR to photos and videos through near-immediate exposure bracketing, but it can also produce natural-looking flash images by combining the lit photo with an unassisted shot to fill in missing detail. Researchers further claim to have automatic noise reduction that safeguards detail through bilateral filtering, an established technique that uses brightness detection to avoid blurring edges. If you're wondering whether or not MIT's work will venture beyond the labs, don't -- the project was financed by contract manufacturing giant Foxconn, and it's already catching the eye of Microsoft Research. As long as Foxconn maintains interest through to production, pristine mobile photography won't be limited to a handful of devices.
NYT: Apple experimenting with wrist-worn iOS devices using curved glass (updated)
Rumors of Apple building a watch-like device have existed since time immemorial -- they've built up the same near-mythical status that the iPhone did pre-2007, or a TV set does today. The New York Times, however, claims that the watch concept exists as more than just some fan art. Reportedly, Apple has been "experimenting" with wrist-wearable devices that would run iOS and use curved glass. Other details are left to feverish speculation, although the OS choice suggests it would be more than just a glorified iPod nano watch. Before we get too excited, we'd do well to remember that any testing in a design lab doesn't equate to production plans: the company might well scrap its work before it ever becomes public, if it's indeed real to start with. Still, there have been enough advances in flexible displays and miniaturization that the notion of connected, wearable Apple gear is no longer as far-fetched as it once seemed. Update: Not to be left out, the Wall Street Journal has made a similar claim. It adds that Apple has explored possibilities with its contract manufacturer Foxconn, although there's not much more to learn at this stage.
Foxconn to allow union elections
For the first time ever, Foxconn is reportedly allowing its workers to elect union representatives. A Telegraph UK report says Foxconn will hold elections for a union chairman and 20 members of the Federation of Labour Unions Committee. Elections will take place every five years. Both Foxconn and Apple have been criticized for poor working conditions, excessive overtime and low pay in the Chinese manufacturer's factories. In response, Apple has started releasing regular Supplier Responsibility Progress Reports and has worked with the Fair Labor Association to improve Foxconn's work environment.
Improvements at Foxconn's China factory
Foxconn has been under the microscope due to excessive overtime and poor working conditions at its Chinese production facilities. A report in the New York Times suggests the company is making changes that'll improve the workplace for its 1.4 million employees in China. These improvements include less overtime, pay increases and improved working conditions. The report chronicles Pu Xiaolan, a migrant worker from Sichuan province who has benefitted from Foxconn's worker-friendlier policies. She previously had a chair to helps her with her work inspecting iPad cases, but it didn't have back support. She would end her shift so sore that she had difficulty sleeping. Pu says she now has a wooden chair with a high, sturdy back that eases the strain on her back. She has even heard of some employees getting chairs with cushions. Apple's influence on Foxconn and its increasingly prominent role in worker's rights is also highlighted in the New York Times article. Human rights groups hope the Cupertino company will continue to focus on improving conditions for factory workers overseas. Many believe Apple has the public stature to initiate major changes in the way assembly workers are treated in the workplace. These improvements would not be limited to Foxconn, they could ripple throughout the entire electronics manufacturing industry. You can read the full article about Apple, Foxconn and working conditions on the New York Times' website.
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.
French reporters infiltrate Foxconn iPhone 5 factory, find few of the vaunted changes (updated)
Envoyé Spécial, a 60 Minutes-like program from public TV station France 2, went undercover at the Zhengzhou iPhone 5 Foxconn factory recently (within the past two months) and reported many of the same problems the Chinese manufacturer and Apple promised to fix earlier this year. According to the story that aired last night, dorms at the new factory were occupied by workers despite the fact that many were still under construction and had no elevators, electricity or running water -- apparently because builders focused on the production lines at the expense of housing. A Foxconn manager even warned employees on hidden camera not to plug devices into dorms that did have electricity, saying that eight workers were killed in a fire after overloading circuits.
WSJ reports Apple has tested TV designs -- don't get too excited
In a saga that makes its lawsuit against Samsung seem like only a brief moment in time, the rumors of an Apple-built HDTV are going around again. After CEO Tim Cook dropped a nugget about TV being an intense area of interest in interviews a few days ago (the exact same thing he said in May), now the Wall Street Journal is reporting rumors from suppliers that it has, for several years, tested designs in concert with companies like Sharp and Foxconn. Of course, reading beyond the headline reveals deep caveats like "Apple ... works with suppliers to test new designs all the time" and "Apple could opt not to proceed with the device" as well as referencing older rumors about team ups with cable or satellite companies, which should let you know that really, nothing has changed. Since this rumor will never die, and the hype will continue to flow when Apple and HDTV are mentioned in the same breath, we'll spell it out for you one more time: no matter what they say or don't say, Apple is -- like nearly every other technology company -- extremely interested in developing products for your living room. They were under Steve Jobs, they are with Tim Cook at the helm. Unfortunately, for reasons ranging from studio licensing agreements to DRM to a lack of access to pay-TV provider data/content, it's very difficult to do with the level of polish and control of experience Apple would like. Microsoft and Sony are spending billions of dollars on their Xbox 360 and PS3 just to grab a foothold in this market, with varying levels of success, while Google's TV project has experienced even tougher growing pains. CBS executive Leslie Moonves explained on a conference call around this time last year why his company had declined to partner with Apple. Read those comments, and you'll probably feel as we do -- until the various regulatory and/or commercial gatekeepers to premium content in the living room change their minds about how the TV business works, it remains just as unlikely that we'll ever experience the products of Apple's tests for ourselves.
Daily Update for December 11, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Foxconn automates workforce prior to US expansion
Foxconn spokesperson Louis Woo told The Wall Street Journal (subscription required) that Foxconn will automate its assembly factories with "the best robots in the business" as a supplement to human labor. During a recent shareholders meeting, Foxconn CEO Terry Gou noted that automated workers will perform many of the "monotonous, repetitive tasks" that are currently handled by low-paid employees. Automation lowers assembly costs, and Computer World's Patrick Thibodeau recently theorized that Apple's US-based Mac manufacturing would be a "robot city," citing clips in promotional videos and a conversation with Larry Sweet, the CTO of Symbotic, as evidence. Additionally, Foxconn announced plans to expand its operations to the US just last week. A plant on American soil would certainly eliminate supply chain issues. As long as Foxconn's new robotic employees aren't stamped "Greystone Industries," we should be good. [Via The Verge]
The Weekly Roundup for 12.03.2012
You might say the week is never really done in consumer technology news. Your workweek, however, hopefully draws to a close at some point. This is the Weekly Roundup on Engadget, a quick peek back at the top headlines for the past 7 days -- all handpicked by the editors here at the site. Click on through the break, and enjoy.
Foxconn seeks to expand North American manufacturing operations
On the same day we started hearing about Apple's plans to manufacture an undisclosed Mac product in the United States, a Bloomberg report indicates that Apple's largest manufacturing partner, China's Foxconn, is looking to increase its presence in North America. Coincidence? Neither company is divulging specifics of their plans, but the timing is interesting. Foxconn, which has come under fire for working conditions at its Chinese factories multiple times in recent years, already operates some manufacturing facilities in the US, in California and Texas. These locations assemble hardware such as servers that are already partially built. According to a spokesperson for the company, Foxconn intends to take advantage of "high-value engineering talent" in the US since it cannot hope to build the same sort of low-cost labor force in the US that it has in China. It will, however, send its US workers to train there on its manufacturing processes before they go to work stateside. You'll recall that Apple has started assembling some of its new iMac computers in the US, but exact details of where this work is taking place have yet to be divulged.
Bloomberg: Foxconn plans US expansion to fill demand for American-made products
Apple CEO Tim Cook caused quite a stir when he announced that at least some Macs would soon be made in the US, and it looks like one of the world's biggest device manufacturers is now set to follow suit. As Bloomberg reports, Foxconn is planning to expand its operations in the US to fulfill what it sees as a growing demand for more Made in the USA products. While not providing many details beyond that, Foxconn spokesperson Louis Woo said in an interview with Bloomberg that "supply chain is one of the big challenges for US expansion," adding that "any manufacturing we take back to the US needs to leverage high-value engineering talent there in comparison to the low-cost labor of China." Of course, while the timing of the news is a bit coincidental, there's no indication yet that Foxconn will be working with Apple on its US manufacturing plans, nor is there any word on any other clients it's lined up.
Foxconn chairman discusses struggle to build iPhone 5
Citing incredibly high demand for the iPhone 5 and quality control difficulties, Foxconn Chairman Terry Gou told Reuters that his company's Hon Hai Precision Industry unit is struggling to assemble enough of the devices to meet Apple's requirements for the latest iPhone. Talking to reporters after a business forum, Gou said, "It's not easy to make the iPhones. We are falling short of meeting the huge demand." Some brokerage firms have reported that another Foxconn subsidiary, Foxconn International Holdings (FIH), is now beginning to build the units. Gou declined to comment. FIH normally assembles phones for manufacturers such as Huawei and Nokia. Several weeks ago, an anonymous Foxconn official told the Wall Street Journal that "the iPhone 5 is the most difficult device that Foxconn has ever assembled." Specifically, the aluminum chassis and in-cell touch panel displays have created production headaches. The anodized chassis has sometimes shown wear or scratches right out of the box, while yield rates for the displays were initially low. Failing to meet demand for the iPhone 5 during the critical holiday buying season could have a negative impact on Apple's earnings and share price. [via AppleInsider]
Hon Hai Precision sees profits surge in Q3
The two-headed beast that is Foxconn / Hon Hai has just released its latest financials, showing that the oft-troubled manufacturer has seen profit margins jump around two percent. It brought in $24 billion (NT$ 711.0 billion) in net sales, generating a net profit of $1.3 billion (NT$ 30.2 billion). At the end of September, it had $1.4 billion stashed in the bank, and the company has said it is striving to enforce "social and environmental responsibility," as it should, really.
Palo Alto Apple Store opens, Shenzhen store nearly ready
Apple continues to expand its retail presence both here in the US and in China. As noted by MacNN, Apple's impressive Palo Alto, Calif., store opened this past weekend. The spacious 15,000 square foot store features an arched-glass roof and is estimated to have cost over US$3 million to build. It's located at 340 University Ave., a thoroughfare which is lined by retail stores, coffee houses and outdoor restaurants. Outside of the US, Apple is also prepping to open its first retail store in Shenzhen, China. The store is located at the Yi Tian Holiday Plaza and is Apple's first store outside the big cities of Beijing, Shanghai and Hong Kong. Shenzhen should be familiar to Apple fans as it is also home to a Foxconn manufacturing plant that assembles the iPhone and iPad. The Shenzhen store will open on Saturday, November 3rd.
Atlantic writer shares Foxconn snapshots
James Fallows, a writer for The Atlantic, recently spent some time poking around the Foxconn plants and dormitories in the Longhua area of Shenzhen, China. These plants are where iPads and iPhones come to life, and have been the subject of scrutiny from many Western writers who believe that the company mistreats employees. Fallows felt the need to point out the "infamous suicide nets" that were installed after a few Foxconn employees jumped from the plant rooftops in past years, and expressed surprise that the employees actually spend time doing such mundane things reading newspapers and relaxing. Apparently his image of the factories and dormitories at Foxconn was that he'd find staffers being beaten and working in dark, damp factories. Instead, he found clean, modern offices; cramped, but well-designed dormitory rooms where a quarter of the 220,000 workers at Longhua receive free housing; and two beautiful swimming pools by the dorms. That's not all; he shows photos of employees looking at a big-screen HDTV offered at a discount, and shopping at "Flying Tiger," a company store where employees can buy phones and cameras. Fallows admits in the third installment of his photo essay that, "I've seen enough other Chinese factories, rural schools, villages and so on to recognize that these are on the higher end of the spectrum." Sure, the factories and facilities aren't up to Western standards, but they're not the hellholes that so many journalists seem to expect. You can check out the first, second, third and fourth installments of the Fallows photo essay by following the links.
Nintendo investigating manufacturer Foxconn after child labor admission
Foxconn, the massive Chinese manufacturing firm that puts together, among many other things, the iPhone and Nintendo hardware like the Wii U, admitted to employing workers under the age of 16. The company released a statement confessing that "Our investigation has shown that the interns in question, who ranged in age from 14 to 16, had worked in that campus for approximately three weeks," in violation of Chinese labor law.In response, Nintendo issued its own statement. "Nintendo is in communication with Foxconn and is investigating the matter. We take our responsibilities as a global company very seriously and are committed to an ethical policy on sourcing, manufacture and labor."Any child labor would also be in violation of Nintendo's own "Corporate Social Responsibility Procurement Guidelines," as part of which Nintendo conducts regular on-site inspections of companies it works with."If we were to find that any of our production partners did not meet our guidelines, we would require them to modify their practices according to Nintendo's policy," Nintendo said in its statement.
Foxconn: iPhone 5 is "most difficult" device we've ever assembled
Apple is facing a manufacturing shortage that's affecting the inventory of its new iPhone 5. Delivery times have slipped to 3-4 weeks and analysts are lowering their sales estimates for the holiday quarter. Foxconn, the Taiwanese company that assembles the iPhone for Apple, told the Wall Street Journal that the iPhone 5 is slow off the assembly line because of difficulties in assembling the device. An anonymous company official told the Wall Street Journal that, "the iPhone 5 is the most difficult device that Foxconn has ever assembled." It's light, thin and its "design is very complicated." Though the company's production is slower than it wants, Foxconn expects that its output will increase as the company streamlines its production lines. The unnamed Foxconn official said that "it takes time to learn how to make this new device" and added that the company's "productivity has been improving day by day."
