iPhone in Canada Blog - Canada's #1 iPhone Resource: Foxconn Able to Retain Apple Contracts with Razor Thin Profit Margins [Chart]

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Foxconn Able to Retain Apple Contracts with Razor Thin Profit Margins [Chart] Jan 5th 2012, 18:58 By Gary Ng on January 5th, 2012 0 Hello there! If you are new here, you might want to subscribe to the RSS feed for updates on this topic. Bloomberg posts an interesting chart that illustrates just how important an Apple manufacturing contract means to Foxconn, builder of the iPhone and iPad. Since the debut of the iPhone in 2007, Apple's profit margins have doubled, whereas Foxconn margins have decreased, to its current razor thin 1.5%: "Hon Hai is willing to sacrifice margins so it can get volume and scale," said Vincent Chen, an analyst at Yuanta Financial Holding Co. in Taipei who has a "buy" rating on the stock. "Apple is also getting so large that it needs a supplier that can provide such scale." Foxconn was previously reported to replace some of its workers with over 1 million robots over the next few years to combat rising labour costs and improve efficiency and yield rates, crucial to securing Apple's lucrative business. Apple has rumoured to have seeked out other manufacturers, such as Pegatron Technology to produce the iPhone 4S. Gary Ng Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow @iPhoneinCanada and on Google+. Click here to save 20% OFF at ZAGG.com with coupon 'iphoneinca'!

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