Hon Hai Precision, also known as Foxconn, is a major partner of Apple and the Taiwan-based company depends a lot on the iOS device maker when it comes to revenue. Reuters claims that about 60 to 70 percent of the company’s income comes from the California-based tech giant. However, now rumour has it that Foxconn’s rival Pegatron Corp is going to share its revenue, as it is looking to form a partnership with Apple. This means that Foxconn could possibly lose ground to its rival if such collaboration takes place. It would be an alarming situation for Foxconn that is already struggling to find its feet in the smartphone market.
These rumours of an Apple and Pegatron collaboration started to whirl after Foxconn’s arch rival commenced hiring of new staff members. According to the report, Pegatron has declared that it is looking to hire another 40,000 employees to boost its current workers strengthen which currently stands at 100,000. As a result of this rumour, speculations regarding the inexpensive version of iPhone were also on the rise because some started to whisper that Pegtron is possibly the sole producer of the much anticipated low budget iOS smartphone.
Birdy Lu an analyst at Daiwa Capital said that, “Pegatron posts a long-term risk to Hon Hai because as it catches up on margins by supplying more components, it can provide more aggressive pricing. Hon Hai’s margin uptrend is not a guarantee.”
One cannot ignore Birdy Lu’s viewpoint, as Pegatron is just a quarter of Foxconn when it comes to revenue. Therefore, Pegatron has the potential to offer Apple more competitive price than Foxconn, especially when Cupertino-based company is looking to cut costs for an inexpensive iPhone. So this raises the chances of Pegatron to score a low-cost iPhone assembly contract with Apple.
According to Jenny Lai, an HSBC analyst, “Hon Hai would see a flat revenue this year at best… while Pegatron has great growth potentials because it is going from nothing to something. But Hon Hai’s margins would improve, benefitting from getting more component orders.”
The chairman of Foxconn has already realised that his company relies too much on Apple therefore he had indicated that they are looking to reduce their reliance on late Steve Jobs’ company. Or the Taiwan-based company might look to score another exclusive contract with Apple, but it is too early to predict something, as nothing is official yet.
Source: iPhoneinCanada
Photo: ZDNet
Tim Cook says “Apple Does Not Funnel its Domestic Profits Overseas”
TELUS Finally Buys Mobilicity for $380 Million
Lunches So Good Kids Can’t Ignore Them
Invigorating Ginger Smoothie
The U.K.’s Youngest Parents Ever
The new hair Jennifer Lawrence