Foxconn's increased costs will need to be reflected to Apple at the end of the day. It may not be ideal for Apple but that is the bitter truth. Apple will then have to pass the added cost to its customers. This may make Apple products a bit less desirable and less competitive, however Apple has already been reaping the benefits of really low costs of manufacturing for a long time now. The profits will take a hit but all in all the game will be a much fairer one for all those involved I think.
It's hard to sympathise with Apple who has banked $98B already !! I am sure it will survive. As a matter of fact, this development will heat up the competition and as result, the end users will benefit.
Prabhakar, Apple has obligations only to its shareholders. It's not the company's job to protect suppliers. During negotiations, a supplier must look to present a case that is in its own shareholders' interest. Did Foxconn negotiate its contract with Apple with that in mind, that is, to maximize shareholder value? If it failed to make that case because it just wants to get the contract then the management has a problem.
Anna, I think they have to share from the profit. Apple is a customer of Foxconn and if they increase the selling price, Apple may look for alternate sources. So I don’t think Apple may share a part of it.
"I doubt Apple will be able to find a cheaper alternative to Foxconn, though"
@Barbara: I don't think it's all about cost in this Apple's case. Foxconn has been there since Apple started producing iPhones and iPods. Part of the success that Apple has got is because of Foxconn. On papers it may just seem to be another EMS that Apple has a contract with, but I think it's a very risky move if Apple decides to make a transition away from Foxconn. There may be lots of factors that go against Apple which cannot be predicted in advance.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.