Hon Hai Says Apple Devices are "Difficult to Make," Looks Forward to the Device's Payoff
June 10, 2011 6:09 AM
Today's annual shareholders meeting revealed that the second half of this year will show great profit gains from iPad production
It's no secret that Apple's iPad and
are wildly popular when it comes to tablet devices. The iPad launched in April 2010, and within its first 80 days of release, about 3 million were sold. When the iPad 2 launched in March 2011, retailers around the world reported that they had already sold out the very next day.
Due to the overwhelming popularity of the iPad tablet, Foxconn, a subsidiary of contract electronics assembler Hon Hai Precision Industry Co., increased production of the device. While this increase in production has worked out fabulously for Apple, it has led to some poor working conditions for Foxconn employees, who have gone so far as
to escape Foxconn.
As if that wasn't enough, a Foxconn electronics factory in Chengdu, which is known for producing Apple's iPad, suffered a
on May 20 that killed three employees and injured another 15. Reports said the explosion was caused by a
buildup of flammable dust
over the plant's polishing workshop.
things are looking up
for Hon Hai as it looks forward to a wealthy second half of this year and next thanks to iPad production. These predictions came courtesy of an annual shareholders meeting today.
According to Terry Gou, chairman of Hon Hai Precision Industry Co., the contract electronics assembler has fallen behind Apple's profit gains because the devices are "difficult to make," and it is in the process of learning more efficient ways of making Apple's latest tech.
In the year ended in December 2010, Hon Hai's net income rose 1.9 percent to NT$77 billion ($2.7 billion) "on a 53 percent jump in revenue to NT$3 trillion." Apple, on the other hand, had a
of 70 percent to $14 billion in the year ended in September 2010.
"We've helped Apple make a lot of money," said Gou. "If our customers make money, then we can also make money. I most fear customers that don't make money."
In addition, shareholders gained more than originally proposed after approving a plan to pay a dividend of NT$2 on 2010 earnings. Hon Hai's plan is to pay a NT$1 a share cash dividend and NT$1 in stock on 2010 profit. After it was approved, stock rose 0.5 percent at NT$100.50 in Tarpei trading after "gaining as much as 1.5 percent to NT$101.50."
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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