It cost more to manufacture in the U.S so taking a cut in profits ain't gonna happen. Before you suggest a company take a cut in profits, ask yourself would you do the same thing if you were running a corporation? Give yourself an honest answer because most people would not take a cut in profits.
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Profit Margin Tensions Souring Relationship Between Apple and Foxconn
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Samsung eventually parlayed its manufacturing contracts with Apple into its own projects. I always figured Foxconn would wind up doing the same.
The logistics of Apple bringing its manufacturing in-house would be staggering but perhaps a “moonshot” worth considering.
Did Apple under Steve Jobs’s first tenure outsource its manufacturing? I know at NeXT he built a very expensive factory that never ran at capacity and had some other technical issues.
The logistics of Apple bringing its manufacturing in-house would be staggering but perhaps a “moonshot” worth considering.
Did Apple under Steve Jobs’s first tenure outsource its manufacturing? I know at NeXT he built a very expensive factory that never ran at capacity and had some other technical issues.
There was an article a year or so ago which described how brutal Apple negotiators are. Maybe I will look it up.
A company shouldn't be squeezed so massively year after year whilst Apple gets all the fruit. In such a massive chain you would want to have healthy relationship with all your "soldiers" that carry "the battle" for you.
Regardless how anyone sees this, this is wrong. Its not just Apple though but yeah, these things shouldn't be defended.
Another example would be Amazon - look how they "torture" employees whilst the top is building a fortune empire. Its just wrong, simple as that. Pay decent wages/profit etc. and everyone is happy.
A company shouldn't be squeezed so massively year after year whilst Apple gets all the fruit. In such a massive chain you would want to have healthy relationship with all your "soldiers" that carry "the battle" for you.
Regardless how anyone sees this, this is wrong. Its not just Apple though but yeah, these things shouldn't be defended.
Another example would be Amazon - look how they "torture" employees whilst the top is building a fortune empire. Its just wrong, simple as that. Pay decent wages/profit etc. and everyone is happy.
Did you even bother reading the article? This article isn't even in Chinese. This is what they're doing and trying to do more of.
Apple makes innovation and research and development is not a manufacturing process. Technology is expensive both in terms of development and human capital. It fact, the easiest thing in the whole process is the manufacturing -- that is why it is easy to move with only the labor cost serving as significant constraints. The manufacturing is just not worth that much to be honest. Welcome to globalism.
Foxconn can always say no or bid higher! They are an industry leader for assembly so if they bid higher and lose a contract most likely smaller partners would not be able to fill the volume so they will still get a piece of the pie and at a better profit margin. I agree that Apple should want happy and healthy (financially) partners but it is not up to them to ensure that those partners bid appropriately for contracts.
It's "wrong" in your opinion only.
Not apples to apples, Foxconn is an assembly business partner not a direct employee.
Reality-
1. Nobody made Foxconn do business with Apple. It chose to do so.
2. There are plenty of other companies that will be glad to gear up and take Foxxcon's business.
3. Apple has every right to get the best price from suppliers to manufacture its products and to realize the best profit margin it can. To do anything else is not only stupid, but is also breaching its fiduciary obligation to its shareholders.
4. It has been said, and it is absolutely true, that Foxxcon is just a contract manufacturer and assembler. It did not create the products that Apple did and undertake all of the associated years of R&D, investment, product development, market risk with a new product, etc. Apple should earn a much higher profit margin to capture that. Foxconn is just a generic manufacturing and assembly line. Sorry, but they bring nothing proprietary to the table that other contract manufacturers couldn't do, so they can't expect to earn nearly as high a profit margin. That is just the real world.
5. If Foxconn believes they are not making enough, do not renew the contract with Apple and look for other customers instead. Again, nobody makes them work for Apple.
6. If you ask me, it is pretty sleazy (and likely a violation of the contract they have with Apple) if they are indeed (1) using Apple owned machinery to manufacture products for others, (2) cutting corners in production, and (3) padding the books with more labor to get a higher reimbursement from Apple.
Not feeling one big sorry for Foxconn, one bit mad at Apple, or having sympathy with any whiners here. This is the way capitalism was and is and is throughout our entire economy and what makes it work. If Apple loses sight of what consumers want it could quickly become a shadow of its current self in the future and ultimately go out of business. That's capitalism too. If folks here do not like Apple products or how it does business nobody is making these individuals buy Apple products. That's capitalism too- vote with your pocketbook.
1. Nobody made Foxconn do business with Apple. It chose to do so.
2. There are plenty of other companies that will be glad to gear up and take Foxxcon's business.
3. Apple has every right to get the best price from suppliers to manufacture its products and to realize the best profit margin it can. To do anything else is not only stupid, but is also breaching its fiduciary obligation to its shareholders.
4. It has been said, and it is absolutely true, that Foxxcon is just a contract manufacturer and assembler. It did not create the products that Apple did and undertake all of the associated years of R&D, investment, product development, market risk with a new product, etc. Apple should earn a much higher profit margin to capture that. Foxconn is just a generic manufacturing and assembly line. Sorry, but they bring nothing proprietary to the table that other contract manufacturers couldn't do, so they can't expect to earn nearly as high a profit margin. That is just the real world.
5. If Foxconn believes they are not making enough, do not renew the contract with Apple and look for other customers instead. Again, nobody makes them work for Apple.
6. If you ask me, it is pretty sleazy (and likely a violation of the contract they have with Apple) if they are indeed (1) using Apple owned machinery to manufacture products for others, (2) cutting corners in production, and (3) padding the books with more labor to get a higher reimbursement from Apple.
Not feeling one big sorry for Foxconn, one bit mad at Apple, or having sympathy with any whiners here. This is the way capitalism was and is and is throughout our entire economy and what makes it work. If Apple loses sight of what consumers want it could quickly become a shadow of its current self in the future and ultimately go out of business. That's capitalism too. If folks here do not like Apple products or how it does business nobody is making these individuals buy Apple products. That's capitalism too- vote with your pocketbook.
I don’t care how popular Apple is. If the QC goes in the toilet so will their reputation and then sales. You can only explain away QC issues for so long by saying no manufacturing process is perfect. That is why there are “lemon laws”.
You make it sound like Foxconn does these shady things because Apple gets so much better margins. However, what it looks to me is that Foxconn is simply dishonest.
The type of attitude some members here have is pathetic with all the "Apple should take a cut in profits" BS. Yeah try running a corporation with stockholders and see if YOU would do that. Furthermore Apple could easily build their own manufacturing plant and take ALL the profit and Foxconn would completely lose Apple's business. So funny how people hate Apple so much here that they can't stand the company making a profit....which is what a company is SUPPOSED to do. They aren't supposed to make "just enough" money to satisfy that Apple hate crowd. SMH.
No way. You have anything to back that up? Also, Apple's iPhone business looks very different today than it did 10 years ago, when smartphones were just starting to really take off.
So basically while Apple’s profit margin has been expanding, Foxconn’s has been shrinking? Yeah I don’t blame them for being irritated and doing their best to make up the difference whenever they can. Apple has never been great at “sharing the wealth,” frankly. Not that Foxconn is likely to share those increased profits with the workers if they ever got them, however.
It's true but the number is actually good. Just so you know, net profit margin is calculated as net income as a percentage of revenue -- and you can go to the financials directly. The net income for the three months ended in 6/20 was 11,253 mm against revenue of 59,685 mm. So Apple's net margin for the quarter ended 6/20 was 18.85%. This is excellent for the industry as Dell's is about 2.29% and Hewlett Packard is at 4.52% for example.
Foxconn isn't going to last long if it keeps pulling crap like it's doing in Wisconsin. Their promised Gen 10 manufacturing plant got downgraded to a Gen 5, and all they have at the moment is a warehouse. They hired bodies to meet a tax benefit, but the hires were paid to do nothing. Meanwhile area residents have been inconvenienced (lost homes, property, etc.) for construction for this project and roads are a mess. Foxconn had also promised to set up plants elsewhere at least twice and then backed out. Scott Walker and the Republicans in party had a large part in this as well. Fortunately my county declined the offer to let them build.
A bit on the fence on this one. Perhaps it’s like when Walmart negotiates lower prices. It’s hard to say no to volume you wouldn’t otherwise have. If Foxconn loses Apple volume, what company is large enough to fill their void?
In regards to Foxconn not contributing anything, I do not agree. If Apple is responsible for all IP on manufacturing processes for their products without the ACTUAL manufacturer then why not just make your own products in house? I’m sure it’s a collaborative effort. Simply put Apple wants to build something and it’s up to Foxconn to get it done. Is it feasible?
I don’t think it’s as black and white as some people make it out to be. We can all see which is the 2 trillion dollar company and which one is not, though.
In regards to Foxconn not contributing anything, I do not agree. If Apple is responsible for all IP on manufacturing processes for their products without the ACTUAL manufacturer then why not just make your own products in house? I’m sure it’s a collaborative effort. Simply put Apple wants to build something and it’s up to Foxconn to get it done. Is it feasible?
I don’t think it’s as black and white as some people make it out to be. We can all see which is the 2 trillion dollar company and which one is not, though.
Better yet they could start actively lobbying for the things that would allow manufacturing to come back to the US - extreme de-regulation. That would be truly impresisive and benefit a much larger population.
Research this. We don't enough skilled laborers in a single state to handle the demand. Various states realized this and put efforts into Vocational education after High Schools but without proper funding from the Federal Government it hasn't taken off.
Except this country doesn't have the workers. They would have to bus them in from all over the country.
It's not as easy as it looks. Here is a list of largest contract manufacturers:
| Company | Industry | Revenue (millions of US $) | Headquarters |
|---|---|---|---|
| Jabil | Electronics | 19,100[2] |
|
| Foxconn | Electronics | 131,800 | 
|
| Flex | Electronics | 23,863[1] | 
|
As one can see Foxconn is essentially order of magnitude larger than the next competitor.