Apple Supplier Foxconn Launching Low-Cost Smartphone Line in Japan Next Year

[MacRumors]

Apple supplier Foxconn Electronics is reportedly gearing up to launch its own line of smartphone devices in Japan, using its recent acquisition of Sharp to help manufacture and distribute the handsets (via DigiTimes). Over the past few years, Foxconn has been a major supplier for Apple device manufacturing, including for the iPhone SE and iPhone 6s and iPhone 6s Plus.

The company is said to be working on entry-level and mid-range options for the lineup, with an expected launch date in the first quarter of 2017, according to sources within the Japanese manufacturing industry. The sources mentioned that it "remains unclear as to which brand Foxconn will use" to market the devices, although it is "highly possible" for the handsets to be sold under a Sharp branding.

However, it remains unclear as to which brand Foxconn will use to market the smartphones it produced in-house in the Japan market, said the sources, adding that it is highly possible those smartphones will be sold under the Sharp brand.

Foxconn's move to introduce cheaper models of smartphones could offset Sharp's Aquos line of devices, which corner the high-end market in Japan but leave the company open to introduce entry-level and mid-range devices for consumers. According to the sources knowledgable of the launch, the addition of Foxconn's smartphones "will enrich Sharp's product portfolios," if the company is indeed the brand attached to the new handsets.

Foxconn has produced its own smartphones under different branding before, but today's report suggests the company is attempting to launch its new devices with a heavier marketing push within Japan. No other descriptive factors of the smartphone's components or features were mentioned in the report.

Most recently, Apple was rumored to be in talks with Sharp to provide OLED displays for next-generation iPhones, with the ultimate outcome of the deal depending on Sharp's capacity to output a large amount of displays. The rumor of Apple's negotiations with Sharp followed a report last week that said the electronics manufacturer is set to spend $570 million on OLED panel production, although its output goal of mid-2018 means it'll miss next year's mega-cycle iPhone 8 launch.

Article Link: Apple Supplier Foxconn Launching Low-Cost Smartphone Line in Japan Next Year

 

[Avieshek]

And one day, Foxconn becomes Apple's rivalry and is the next Samsung.

 

[ike1707]

They should just sell them in China and call them iPhones

 

[2457282]

And one day, Foxconn becomes Apple's rivalry and is the next Samsung.

yup. first it was Google (member of Apple's board at the time) when they surprised Apple with Android. Then it was Samsung (provider of many of the internals of the iphone) that copies and competes with iphone. Now Foxconn that assembles all the phones. At some point Apple will need to think about buying their supply chain and going vertical. It really is the only way to avoid creating your own competition.

 

[macduke]

Foxconn is going to take all of this experience and machinery developed in close relationship with engineers and designers at Apple, and start cranking out their own high-quality, polished devices on it. I wonder how Apple feels about this? What can Apple do to head this off? Can we finally find a way to move production to the U.S. now? I always figured Foxconn didn't do this because of various non-compete clauses in their manufacturing contracts. This makes me wonder if Apple is going to be moving away from using Foxconn at some point in the next year or two.

 

[CarpalMac]

An iPhone 6S running Android, yes please!



{Waits for the inevitable "no thanks" reply...}

 

[Keane16]

An iPhone 6S running Android, yes please!

Isn't that pretty much a Google Pixel. (aside from a few cosmetic differences, no 3D Touch which Android doesn't support yet anyway and a lesser SoC but this rumoured Foxconn phone won't match the A9).

Or were you just kidding us.

Foxconn is going to take all of this experience and machinery developed in close relationship with engineers and designers at Apple, and start cranking out their own high-quality, polished devices on it. I wonder how Apple feels about this? What can Apple do to head this off? Can we finally find a way to move production to the U.S. now? I always figured Foxconn didn't do this because of various non-compete clauses in their manufacturing contracts. This makes me wonder if Apple is going to be moving away from using Foxconn at some point in the next year or two.

Plenty of manufacturers already put out "high-quality, polished devices" using Android as the OS. But the software/hardware optimisation, the services underpinning the handsets, the Apple Store customer service, the Mac - iPhone - iPad - Apple TV - Apple Watch ecosystem with the software that ties all of it together, the privacy benefits - that's where the value lies for me when choosing Apple.

The Foxconn phone will be battling with the low cost Xiaomi devices more than Apple.

 

[69Mustang]

yup. first it was Google (member of Apple's board at the time) when they surprised Apple with Android. Then it was Samsung (provider of many of the internals of the iphone) that copies and competes with iphone. Now Foxconn that assembles all the phones. At some point Apple will need to think about buying their supply chain and going vertical. It really is the only way to avoid creating your own competition.

Say goodbye to all that glorious profit margin. Say goodbye to the ability to leverage component companies. Say goodbye to having the luxury of letting tech mature before implementing. If Apple takes on everything soup to nuts, an incorrect decision could have far reaching implications that would be harder to overcome if they are in it by themselves.

I am over-simplifying to the -nth degree, but there's really no advantage for Apple getting into manufacturing. At least no tangible advantage that I can see. Most manufacturers survive on a low margin, high volume, diverse customer base. Apple being Apple's only customer takes away the high volume and diverse customer base, but keeps the low margin.

 

[lk400]

yup. first it was Google (member of Apple's board at the time) when they surprised Apple with Android. Then it was Samsung (provider of many of the internals of the iphone) that copies and competes with iphone. Now Foxconn that assembles all the phones. At some point Apple will need to think about buying their supply chain and going vertical. It really is the only way to avoid creating your own competition.

Why? Can you explain a little more how you got to that conclusion?

 

[asleep]

And they'll bear an uncanny resemblance to iPhones.

 

[Jacquesvw]

.

 

[2457282]

Say goodbye to all that glorious profit margin. Say goodbye to the ability to leverage component companies. Say goodbye to having the luxury of letting tech mature before implementing. If Apple takes on everything soup to nuts, an incorrect decision could have far reaching implications that would be harder to overcome if they are in it by themselves.

I am over-simplifying to the -nth degree, but there's really no advantage for Apple getting into manufacturing. At least no tangible advantage that I can see. Most manufacturers survive on a low margin, high volume, diverse customer base. Apple being Apple's only customer takes away the high volume and diverse customer base, but keeps the low margin.

Why? Can you explain a little more how you got to that conclusion?

Indeed it is hard to work through this in an overly simplified manner. Having said that, I will try to explain myself.

What we have seen in the three examples I used, is that Apple invests in a company that then grows up and turns on Apple. So how do you prevent that. One way is to invest in becoming owners of the supply chain, maybe not full owners, but enough to have a seat on the board to ensure that they don't turn and bite the hand that feeds. @69Mustang has a valid point that being fully vested into one company with one technology could make it difficult to accept or move into newer/better technology. This is why this is a difficult issue. However, being 100% divested of the supply chain has not helped Apple so my thought is that they may want to look at this again. For example, Foxxcon is mostly the assembly people and not the foundry or other technical component builder. that would be something they could bring in house (it would kill the rumor mill however). Investing into being part owner of the chip plants would be an alternative to owning it outright, but would still give Apple more influence than what it has today. These are obviously my thoughts from afar, so there are probably lots of other ways to address this, bit to reuse my analogy, Apple's hand has been bitten a lot and they really need to look at how to stop that.

 

[Nunyabinez]

The majority of parts in iPhones are made by other companies. There is nothing stopping anyone from building a phone with many of the same parts.

It is likely that the reason that this hasn't happened before, is that much of Foxconn's capacity has been absorbed by Apple. With a reduction in orders, or at least a perception that orders are dropping, it makes sense for Foxconn to find something to do with excess capacity.

That could be making more products for Microsoft (Foxconn has many customers), or they might as well use it for their own product.

Regardless, they will be no different than any other handset maker, in that they will have to pay fees for patented technologies. The only advantage they have is that they don't have to find an assembler, because they already are one.

I doubt Apple will even care.

 

[macs4nw]

They should just sell them in China and call them iPhones

You mean iPhoney's.....?

And one day, Foxconn becomes Apple's rivalry and is the next Samsung.

Well, by now they certainly have a lot of the required knowledge. Not sure how these scenarios can be avoided, especially in light of differing attitudes in some countries towards respecting IP.

 

[Tycho24]

In what universe is Sharp Acquos "high-end"?? Lol.

 

[Mactendo]

Sharp Aquos is a beautiful phone.

 

[MRI3T]

yup. first it was Google (member of Apple's board at the time) when they surprised Apple with Android. Then it was Samsung (provider of many of the internals of the iphone) that copies and competes with iphone. Now Foxconn that assembles all the phones. At some point Apple will need to think about buying their supply chain and going vertical. It really is the only way to avoid creating your own competition.

Buying a supply chain... i don't think that would Benifit Apple.... what you are forgetting is competition... competitive supply chains equal lower costs to Apple, & better quality... if Apple owns everything, then there is no competition in the market! That is how we get new innovative hardware!

 

[8973918723969236591265]

You mean iPhoney's.....?

Well, by now they certainly have a lot of the required knowledge. Not sure how these scenarios can be avoided, especially in light of differing attitudes in some countries towards respecting IP.

The first decision any smartphone buyer makes is which OS.

One more low to mid range Android OEMwill have zero impact on Apple, though they may damage Smugsan

 

[mejsric]

And one day, Foxconn becomes Apple's rivalry and is the next Samsung.

Apple may think thats the fastest way to kill Samsung.

 

[thewitt]

You guys do realize that Foxconn already manufactures for many of Apple's competitors, right?

 

[CedricT]

Odd they would start by trying to crack the Japanese market first. You'd think it would be easier to start with say, India, where there is a bigger market for lower priced phones, and where there are lower expectations on what features a good phone should have.