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Foxconn Outfoxed

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Cryptoman
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Increased costs will have to be passed on
Cryptoman   5/4/2012 7:05:11 AM
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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.

t.alex
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Re: On Whose Shoulders? Consumers, Highly Likely...
t.alex   5/2/2012 7:01:03 PM
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Wale,yes I think there is some possibility here. But that would make Apple's products less competitive to Android equivalent.

Wale Bakare
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On Whose Shoulders? Consumers, Highly Likely...
Wale Bakare   5/2/2012 5:07:42 PM
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t.alex, i dont think you should expect Apple taking it but to consumers's. Apple would probably pass it onto its product prices.

t.alex
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Re: profit sharing
t.alex   5/2/2012 9:03:00 AM
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Apple prices its products not just base on cost but other factors such as ecosystem (appstore, iCloud, etc.).  I think it should absorb the cost, and not pass down to customers.

bolaji.ojo
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Re: it is confusing
bolaji.ojo   5/1/2012 7:51:38 AM
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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.

Jacob
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Re: it is confusing
Jacob   5/1/2012 5:51:28 AM
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Prabhakar, this is like two sides of a coin. They want to get maximum profit at one end and other end they don’t want to shell out anything for other reasons.

Jacob
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Re: profit sharing
Jacob   5/1/2012 5:48:47 AM
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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.

prabhakar_deosthali
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it is confusing
prabhakar_deosthali   4/30/2012 11:57:56 PM
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At one time we were saying that Foxconn is forcing their labor force to work at below par wages .

Now we are saying that Apple is not sharing a proportionate amount of its profit with its suppleirs

So it is not Foxconn but Apple to be blamed isn't it?

I am confused.

TaimoorZ
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Re: Pass it on...
TaimoorZ   4/30/2012 10:11:49 PM
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"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.


Anna young
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Re: profit sharing
Anna young   4/30/2012 6:20:43 PM
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Yes, I agree. Who should Foxconn pass the higher cost to?

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