Foxconn Raising Prices on Apple?

[MacRumors]

Reuters briefly reports on a note from Citibank analyst Chang Kaiwei claiming that Apple manufacturing partner Foxconn and its parent company Hon Hai are preparing to raise the prices they charge to their customers for manufacturing devices such as the iPhone.

Hon Hai, the world's largest electronic parts maker, will raise prices from October for some clients, including Apple, according to a Citibank analyst, a Taiwan newspaper reported on Wednesday.

The move, said to be designed to boost quarterly profits for the firms, is also said to affect Nokia, Microsoft, and Sony Ericsson.

It is unclear how much of a price increase Hon Hai is targeting, and thus whether Apple will be able to maintain its existing pricing for its customers or if it will be forced to pass along some of the increase. Apple will presumably make every effort to maintain its current price points, and its healthy gross margins should offer the company some flexibility in this regard, although any change in Apple's cost situation would likely have an effect on Apple's forward-looking financial guidance and investor sentiment.

Article Link: Foxconn Raising Prices on Apple?

 

[Theclamshell]

The new Macbook Pro. Only $25,000

But seriously, i hope this does not result in a major price hike form apple :/

 

[alphaod]

So Apple will simply switch manufacturers?

Or if they do raise the prices and Apple sticks with them hopefully they increase the worker's wages, and manufacture higher quality goods.

And what's with the excess amount of non-Chinese people in their image.

 

[flopticalcube]

So Apple will simply switch manufacturers?

Or if they do raise the prices and Apple sticks with them hopefully they increase the worker's wages, and manufacture higher quality goods.

The only thing I think apple will get out of this is price increases. I don't see anything else changing. It's been a long time in coming, IMO.

 

[Brinkman]

Probably never going to happen but I'd love to see the day apple products were made in the states.

 

[mobi]

After China, the next frontier will be...

 

[Warbrain]

Probably never going to happen but I'd love to see the day apple products were made in the states.

I hope you don't mind paying the price of a ****** car for a top-notch computer.

 

[Dillenger]

Ching, Ching, why not cash in on the good fortune of great sales. It's the American, Ahhh Chinese way.

 

[WiiDSmoker]

Probably never going to happen but I'd love to see the day apple products were made in the states.

The price of an iPhone would at minimum quadruple.

 

[X38]

With $40B cash on hand and the second highest stock valuation in the world, Apple is well positioned to pull manufacturing back in-house and should do so sooner rather than later. Outsourcing is a damn fool idea that worked only as long as countries like China artificially manipulated currency exchange rates. Problem is, the exchange rate manipulations have gone as far as they can and have pushed trade imbalances to preposterous levels that can not be sustained. Huge corrections in exchange rates are inevitable and will only get more severe the more governments try to resist the natural economic pressures on the rates. It will be a time of turmoil and massive cost inflation for those who depend on supposedly 'low-cost' manufacturing countries. Those companies who figure it out and start 'in-sourcing' their manufacturing before the house of cards falls apart are the ones who will survive the chaos.
Apple is probably better positioned than anyone to do so, if they are smart enough to see it coming.

 

[VelfarreClubber]

That is one funny picture. What are they all smiling at?

 

[rp2011]

I think it's about time a US electronics company took the effort to built a state of the art manufacturing facility here in the us. Figured out how to automate the stuff we hire cheap manual labor for. Why should China have all the suicides and toxic waste.

 

[acurafan]

Probably never going to happen but I'd love to see the day apple products were made in the states.

right, to pay for my already overpriced laptop only made by United Apple Workers union who drinks and smoke pot during lunch.

ives opens his newly minted liquid metal MBA smelling like a friggin bottle Colt 45 or it came with a 'special' piece of hash...left by our proud UAW worker, nice.

 

[Adisah]

Made in USA.

What they need to make is facilities that are fully automatic. No workers. Just a handful of experts over seeing things. Or have a lot less workers due to more automation.

 

[Lucky736]

Two things:

One, these costs are done over large time periods. They are contracted. They won't be assumed until future contracts.

Two, Apple owns probably the most advanced electronics "factory," if that is the proper word, the world has ever seen in CA. They would just make essentially a bigger one.

 

[IBradMac]

...

And what's with the excess amount of non-Chinese people in their image.

Have to be diverse these days...don't want to piss anyone off.

 

[Full of Win]

The NT is trading in the mid 30's (between 30.0 to 31.0) relative to the USD. It was a few NT's per dollar higher in the past. Since Foxconn (not their name in TW) gets profits in NT's, they have to raise prices.

After China, the next frontier will be...

India

 

[rp2011]

Anyway, I am sure Apple has already looked at the viability of some kind of automated state of the art facility from every direction and angle. If it becomes feasible it will happen. It's not like they are too cash strapped to make it happen if they wanted to.

 

[alexbates]

Why would Apple have to raise their prices? If the iPad cost $15 to manufacture because of this, up from $10, Apple wouldn't sell the iPad for $504...

I hope this happens, and the wages of workers are increased. They deserve more money for the amount of work they do each day.

 

[wegotmac]

Made in the USA

Probably never going to happen but I'd love to see the day apple products were made in the states.

The sad story is once upon a time Apple products used to be made in the USA. It'd be great to it come back though

 

[majordude]

After China, the next frontier will be...

America.

First, America outsourced to Japan. They became rich. Then we went to Korea. They became rich. Then we went to Mexico. They became rich. Then we went to China. They became rich.

Each time we gave away manufacturing jobs and technology.

We became poorer.

Soon the world will outsource to us and we will be thankful for manufacturing TVs, computers and sex robots for the Chinese, Japanese, Koreans and Mexicans.

What they need to make is facilities that are fully automatic. No workers. Just a handful of experts over seeing things. Or have a lot less workers due to more automation.

You are zigging when you should be zagging. Humans are the cheapest robots known to man. They are readily available, infinitely replaceable and can easily be manufactured (for free) with unskilled labor.

 

[Shookster]

The move, said to be designed to boost quarterly profits for the firms

No pay rise for the workers, it would seem. I honestly wouldn't mind paying $30-40 more for a device that already costs hundreds (or thousands) of dollars if it means the person making it gets a decent salary.

 

[nagromme]

That is one funny picture. What are they all smiling at?

Well, except for the guy in the very corner, whose grim expression seems to say, “those aren’t just flying bunnies... those are flying bunnies with machine guns!”

 

[Brinkman]

Made in USA.

What they need to make is facilities that are fully automatic. No workers. Just a handful of experts over seeing things. Or have a lot less workers due to more automation.

Exactly.

 

[DTphonehome]

Look, everyone was complaining about poor treatment of employees by Foxconn, so they raised salaries, relocated many employees to be closer to their families, etc. All these moves cost money. Foxconn wasn't interested in spending it until the media started howling that the people who make the most popular electronics in the world are committing suicide en masse (sarcasm). So, now we've all got to pony up the additional few bucks per item. Personally, I think it's well worth it... the reason we get this stuff so cheap is because China's labor standards are not up to the same level as the US and Europe. But if enough people demand that Western-style labor practices are established in China, the price differential between Asian and Western manufacturing will decrease. This will raise the standard of living for Chinese, and possibly bring some manufacturing back to the West as the cost benefit of outsourcing is reduced.