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Foxconn Profit Rises 41% on Strong iPhone Sales, Low-Cost iPhone to Drive Similar Gains at Pegatron

Hon Hai Precision Industry Co., Apple's primary iPhone and iPad assembler, has experienced a 41% jump in second quarter net profit thanks to strong iPhone sales, reports The Wall Street Journal.

The company, better known as Foxconn, saw a net profit of NT$16.98 billion, which is approximately US$566.7 million. During the second quarter of 2012, Foxconn's net profit was just NT$12.06 billion. Foxconn reportedly earns more than 40% of its revenue from Apple.

foxconn_workers_2
Foxconn's high profit numbers mirror Apple's own record breaking Q2 iPhone sales of 31.2 million units, first announced during the company's third quarter earnings call. Foxconn could see even greater profits in the coming quarters as Apple gears up to release its next generation iPhone, along with additional products like the fifth generation iPad and the Retina iPad mini in the fall months.
Apple is also expected to unveil a new iPhone this fall, which would help pad Hon Hai's earnings in the second half of the year, typically a strong selling season for technology companies due to the back-to-school and holiday shopping seasons.
The products Apple has in the works will also have a huge impact on Pegatron, the company assembling Apple's low-cost "iPhone 5C". According to analyst estimates, the new phone could contribute as much as 40% to Pegatron's third quarter revenue. At a recent investor conference, Pegatron estimated that its sales would grow 40%–50% in Q3 2013.

Both Pegatron and Foxconn have been reported to be hiring a number of new employees as production ramps up on the upcoming devices.

Apple's next generation iPhone 5S is expected to be released during a September 10 event, but it remains unclear if the event will also include the iPhone 5C. Apple is also expected to hold a second event in the last three months of the year to debut new iPads.

Top Rated Comments

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9 months ago

All this profit and companies can't seem to pay their employees more :confused:


Nothing is stopping you from making your own company and paying employees what you want.
Rating: 6 Positives
9 months ago
Can we have a new Foxconn stock photo? Seems like the same three over and over.
Rating: 6 Positives
9 months ago

And yet according to every half whit analyst and for this and that Apple is going fail. Contradictions are driving me nuts.

Fail to see how they will fail any more than any othe big company. Of course they are loosing market share but that's what happens when dozens of cheap competitors join the Frey and some of the practically and literally give away stock and claim it as legitimate sales.

It's easy to undercut a market. Much harder to produce high quality product. My experienced with a couple of the different Android mush mash was appalling. I can't see what anyone sees in them. SERIOUSLY IT'S RUBBISH! Stop buying the sheet, your bringing all humanity down a notch. Bloody moans atolls...


I'm going to try to explain this to you in hopes that you actually come away with some idea of what's going on because you don't have a clue what you're talking about.

No analysts are saying Apple is likely to "fail" or go out of business. They are suggesting that Apple's growth is slowing (which it is) and that going forward it will make much smaller gains than it had been previously. This is somewhat expected to happen as any market matures and solidifies. All the market really gets excited about is future growth and investors are who the analysts are writing for, not Apple or Samsung fanboys on the Internet.

Remember how IBM used to be the name in computing? You probably don't because it was in the 1960's. Did IBM go away? No. Are they the name in computing anymore? No. Apple risks going in a similar direction.

Please show me where manufacturers are "giving away stock". Sure, Android manufacturers are making smaller margins, but the idea that some manufacturers are giving away or even eating a loss just to make Google look better to fanboys on the Internet is absurd.
Rating: 5 Positives
9 months ago

Surprised. Didn't think Apple was doing this well. Maybe Foxconn had mistaken Apple for Samsung ;)


Correct me if I'm wrong ... Wasn't Samsung kicked out of foxconn because they stole a lot of ideas from other companies ??
Rating: 5 Positives
9 months ago
But I thought Larry Ellison said Apple was going under?
Rating: 3 Positives
9 months ago
And yet according to every half whit analyst and for this and that Apple is going fail. Contradictions are driving me nuts.

Fail to see how they will fail any more than any othe big company. Of course they are loosing market share but that's what happens when dozens of cheap competitors join the Frey and some of the practically and literally give away stock and claim it as legitimate sales.

It's easy to undercut a market. Much harder to produce high quality product. My experienced with a couple of the different Android mush mash was appalling. I can't see what anyone sees in them. SERIOUSLY IT'S RUBBISH! Stop buying the sheet, your bringing all humanity down a notch. Bloody moans atolls...
Rating: 3 Positives
9 months ago
All this profit and companies can't seem to pay their employees more :confused:
Rating: 3 Positives
9 months ago

Correct me if I'm wrong ... Wasn't Samsung kicked out of foxconn because they stole a lot of ideas from other companies ??


Correct, and they continue to steal. Daily. ;)
Rating: 3 Positives
9 months ago

Profits are what's left after paying employees. That 41% bump is in profits. I wouldn't be surprised if workers' rates don't go up one penny. Maybe they'll give the workers a nice Foxconn coffee mug. That's what happens in the good old USA ;)


Rise in profit comes from rise in revenue. Rise in revenue comes from building more devices. Building more devices means employing more people. If a company grows profits by 40% by employing 40% more workers, then there's no reason to pay more.

On the other hand, it seems that wages at Foxconn have been increased quite a lot in the last years. Just type "Foxconn wage rise" into Google. It seems your assumption that Foxconn workers don't get raises seems to be based on prejudice and ignorance alone. From Forbes:

"Sources now claim that Gou declared at a function on May 16 that simply catching up to Taiwanese wages is not enough, and that monthly salaries for workers in China should be doubled to 4,400 yuan (US$690) by the end of 2013. If the claim proves to be true, this would be Foxconn’s fourth announced salary hike in China in the last two years. It would also represent a near five-fold salary increase for the company’s 1 million workers on the mainland since 2010."
Rating: 2 Positives
9 months ago

Correct me if I'm wrong ... Wasn't Samsung kicked out of foxconn because they stole a lot of ideas from other companies ??


Mmm, no, you're wrong?
Rating: 2 Positives

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