MacRumors

Taiwanese iPhone manufacturer Foxconn is considering a $7 billion joint investment with Apple to establish a display manufacturing facility in the United States, it was reported on Sunday.

According to the Nikkei Asian Review, journalists who attended Foxconn's annual end-of-year party quoted chairman Terry Gou as saying that Apple is seeking to invest with the firm in a U.S. facility, which will eventually create 30,000 to 50,000 jobs.

The increase in demand for larger display panels makes local production a better solution than shipping from China to the U.S. market, Gou told reporters. In addition to the proposed display facility, Gou said Foxconn plans a new molding facility in the U.S., with the state of Pennsylvania earmarked as a possible location following investment discussions with local officials.

Gou also said that Smart Technologies, a Foxconn-controlled interactive display startup based in Canada, may move south of the border, after U.S. President Donald Trump signaled a possible renegotiation of the North American Free Trade Agreement.

According to reports, Gou said that the rise of U.S. protectionism was an inevitable consequence of the Trump administration, but questioned whether American consumers would be willing to pay significantly more for products as a result.

"In the future they may be paying some $500 more for U.S. products, but those do not necessarily work better than a $300 phone," he said, after urging U.S. authorities to provide concessions on land and electricity to facilitate Foxconn's manufacturing operations.

"Yes, we will continue to add to our investments in China," Gou told reporters. "China is the world's biggest market, and why should we turn down the biggest market?"

Foxconn's facility in Zhengzhou, China, produces over 100 million iPhones every year. Taking into account production from Taiwan and Hong Kong, China was responsible for more than 19 percent of Apple's global revenue in the fourth quarter of 2016.

Rising tension between the U.S. and China could benefit Gou, say people familiar with the tycoon's style. "Foxconn is known to leverage different provinces and countries against each other for better terms," an industry source said, suggesting Gou could pit both countries against each other as both sides courted new investments from the company.

Earlier this week it was reported that Foxconn was planning a new facility next to Apple's forthcoming research and development center in the southern Chinese city of Shenzhen. "Foxconn will not leave. Foxconn will stay in China," Gou told reporters in Guangzhou, when asked whether he plans to move existing manufacturing sites to the United States.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Noted KGI Securities analyst Ming-Chi Kuo released a research report today in which he outlined further expectations for Apple's 2017 iPhone, including new biometric identification technology as well as the necessity of a new design to provide better structural support for a flexible OLED display with 3D Touch capability.

Apple may switch to a film sensor from the current FPCB sensor in order to provide better 3D Touch user experience, as a film sensor offers higher sensitivity. Also, we expect the new OLED iPhone will come with a flexible OLED panel. To avoid deforming the form factor of the flexible OLED panel from touch operation pressure, a metal structural part will be placed under the film sensor to provide more robust structural support.

Kuo also believes Apple is developing a new Touch ID technology for its next iPhone "to complement its full-screen (zero bezel) form factor design and to enhance transactions security". According to Kuo, the existing "under glass" design of fingerprint recognition doesn't meet the requirements of full-screen form factor designs, therefore an "under panel" placement is required.

As a result, Kuo says Apple aims to switch from the current capacitive-type to an optical-type system. Despite the technology still being in the early stages of development and the fact that OLED panel makers will have to provide bespoke designs for the system to work, Kuo believes Apple has the bargaining power to request the customizations.

Notably, Kuo believes the fingerprint recognition system will "ultimately be replaced by a facial recognition system" for enhanced security. "However, if the technical challenges cannot be overcome, we believe a combination of fingerprint and facial recognition is another possible solution."

Judging by the bio-recognition patents that Apple has applied for, we believe it is leaning toward facial recognition technology rather than iris recognition. However, we note that the technical challenges of facial recognition include: (1) algorithms; (2) hardware design; and (3) the build-out of a database for verification and authentication, which could be time consuming. As such, before Apple can fully replace the fingerprint system with facial recognition, a combination of the two steps of bio-recognition could be a valid solution for enhancing transactions security.

Assuming the technological challenges are not too great and adoption this year isn't too soon, Kuo suggests Apple's new system will usher in a "paradigm shift" for the application of biometric identification in smartphones.

Kuo's latest report builds on previous predictions regarding this year's "10th anniversary" iPhone, which is expected to feature a radical redesign with an embedded home button in an edge-to-edge display, a glass body, and potentially wireless charging. Previous rumors suggesting the iPhone 8 could include advanced biometric features like facial recognition or iris scanning have pointed to the possibility that they could also power augmented reality camera functions.

Following news yesterday that Apple has filed suit against LTE modem supplier Qualcomm for engaging in anticompetitive licensing practices, the chipmaker hit back on Sunday by calling Apple's claims "baseless" and accusing it of "encouraging regulatory attacks".

Apple shared a statement with several news sites on Friday announcing the lawsuit, which argued that Qualcomm used its position as the sole supplier of a key iPhone component to drive up patent licensing fees. This morning Qualcomm responded in a statement on its website in which it claimed that Apple "intentionally mischaracterized our agreements and negotiations".

"While we are still in the process of reviewing the complaint in detail, it is quite clear that Apple's claims are baseless. Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program. Apple has been actively encouraging regulatory attacks on Qualcomm's business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information. We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple's practices and a robust examination of the merits," said Don Rosenberg, executive vice president and general counsel, Qualcomm Incorporated.

Qualcomm was the sole supplier of LTE modems used in iPhones up until 2016, when Intel also began providing the component with the launch of the iPhone 7 and iPhone 7 Plus. Apple claims Qualcomm forced it to use the LTE chips and pay back a percentage of the selling price of the phone in return for access to its patents.

Apple wants $1 billion in rebate payments, which were withheld by Qualcomm after Apple became involved in an antitrust investigation against the company in South Korea.

Group FaceTime calls will be a new feature introduced in iOS 11, according to an unverified rumor shared by Israeli site The Verifier. Citing "several people familiar with iOS development," the site says group FaceTime calls are being worked on by Apple's iOS 11 team, with some of the work taking place in Israel.

Said to be a "social" update that focuses on iMessage and FaceTime development, iOS 11 will reportedly let users start multi-person calls through a group conversation in iMessage. Up to five people at once will be able to participate in a call.

The Verifier is not a site with an established track record for accurate rumors, so it is not clear how reliable this information is. We've heard few details on iOS 11 at this point in time, so the rumor should be viewed with skepticism until backed up by a secondary source.

The site also says that Apple could choose not to release group FaceTime calls in iOS 11, instead saving the feature for a future update.

Group FaceTime calls have been a long-desired feature on iOS and Mac devices, and would go a long way towards bringing FaceTime more in line with Microsoft's Skype software, which allows several people to communicate with one another through video chats.

iOS 11 will likely be released alongside new iPhones in the fall of 2017, but we expect to see a preview of the new software at the Worldwide Developers Conference, likely to be held in June of 2017.

Following an FTC complaint alleging Qualcomm engaged in anticompetitive patent licensing practices, Apple has filed a lawsuit against Qualcomm claiming the company has charged unfair royalties for "technologies they have nothing to do with."

According to a statement Apple shared with several news sites, Qualcomm "reinforces its dominance" through exclusionary tactics and high patent licensing fees. Apple's full statement is below:

"For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations. Qualcomm built its business on older, legacy, standards but reinforces its dominance through exclusionary tactics and excessive royalties. Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.

To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1B in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.

Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts."

In the lawsuit, filed in a federal district court in the Southern District of California, Apple accuses Qualcomm of using its position as the supplier of a key iPhone component to drive up patent licensing fees.

Qualcomm supplies the LTE modems used in Apple's line of iPhones, and up until 2016, the company was Apple's sole supplier. The iPhone 7 and the iPhone 7 Plus use modems from both Qualcomm and Intel.

Qualcomm reportedly forced Apple to use its LTE chips exclusively in iOS devices and pay a percentage of the total average selling price of an iPhone for access to Qualcomm patents.

Qualcomm is supposed to provide Apple with quarterly rebates, but has failed to do so for the past year because of Apple's participation in an antitrust investigation against Qualcomm in South Korea. That investigation led to an $850+ million fine against Qualcomm for anticompetitive licensing practices.

Apple is seeking $1 billion in rebate payments that have been withheld.

Earlier this week, the United States Federal Trade Commission filed a lawsuit against Qualcomm that focused in part on Apple and Qualcomm's licensing deals. According to the FTC, Qualcomm imposes "onerous and anticompetitive supply and licensing terms" on its smartphone partners by abusing its patent portfolio.

Qualcomm has said it has "grave concerns" about the lack of evidence supporting the FTC's allegations and has promised to defend itself in federal court.

Update 1/25: Apple has also filed two lawsuits against Qualcomm in Beijing. The first, which seeks 1 billion yuan ($145.32 million) in damages accuses Qualcomm of abusing its clout in the chip industry. The second claims Qualcomm has not fulfilled promises to license standard essential patents fairly.

Apple CEO Tim Cook sold 30,000 shares of Apple stock this week, valued at $3.6 million based on the company's stock price of $120 at the time of the transactions, according to a U.S. Securities and Exchanges Commission disclosure. The shares were sold as scheduled pursuant to Cook's predetermined trading plan.

Cook retains 1,009,809 company shares worth over $121 million based on Apple's current stock price following the sale.

A recent SEC filing revealed Cook was paid $8.7 million in 2016, which is $1.5 million less than he was paid in 2015. The decrease stems from Apple failing to meet its own target performance goals for both net sales and operating income in 2016, resulting in senior executives receiving only 89.5% of their cash incentives.

However, upon reaching his fifth anniversary as Apple CEO last year, Cook cashed in nearly $137 million in previously-awarded stock bonuses tied to both his tenure and Apple's performance under his leadership. Accordingly, after bonuses, Cook actually earned roughly $145 million last year, his biggest payout yet.

Yesterday, Apple analyst Neil Cybart opined that Cook and his inner circle are "doing what needs to be done in order to maintain Apple's relevancy," but he noted "there is room for improvement." He called out sporadic Mac and iPad updates, and slow progress with Siri, as two blemishes among others in its product strategy.

In attempt to add a bit of relative context to this subjective grading:

• Product Strategy: A-
• Product Pipeline/R&D: A
• Operations: B-
• Marketing/Storytelling: C+
• Culture: B+
• Public Face: A+
• Financials: B

In related shareholder news, the world's largest asset manager BlackRock has increased its stake in Apple and now holds 6.1% of outstanding shares in the company, up from 5.7% a year ago. Its 322,683,504 shares are valued at over $38.7 billion based on Apple's current stock price.

Simply Mac, a well-known Apple Authorized Reseller and Service Provider owned by GameStop, is shutting down a number of its brick and mortar stores across the United States.

Locations in North Carolina, North Dakota, Montana, Texas, Illinois, Indiana, Utah, Idaho, Maryland, South Dakota, and more, are closing this week.

A notice sent out by the West Acres Mall in Fargo, North Dakota:

We wanted to reach out to you with news of another change at West Acres. As of today, Simply Mac has closed. Simply Mac opened at West Acres in August 2014 and we've enjoyed having them as part of the West Acres family.

The closure is due to the Apple Corporation ending its national agreement with Simply Mac to sell them Apple product, making it impossible for them to continue. They will be onsite for a few days to help with customers who have repaired items to pick up.

A GameStop spokesperson who spoke to the Midland-Reporter Telegram in Texas and the Billings Gazette in Montana said the closure of the Simply Mac store in that location was done as part of a business transformation plan that involves closing non-productive store locations.

"As GameStop announced in its holiday sales release, the company continues to focus on the execution of our business transformation plan, which includes growing our non-gaming businesses and right-sizing our global store portfolio across all our retail brands. This involves evaluating and closing non-productive locations. The closure of this Simply Mac store is part of that strategy."

It is not clear why there is mixed information being shared about the store closures, but it appears that only a select number of stores are being shuttered at this time. We've reached out to GameStop for a full list of the locations that are disappearing.

The closure of several Simply Mac stores comes as GameStop faces flagging sales. Earlier this month, GameStop announced that its holiday sales fell 16.4 percent compared to 2015.

Apple's new line of iPad models might not launch "until the second half of 2017," according to sources in the upstream supply chain speaking with DigiTimes. The new 9.7-inch iPad is predicted to enter mass production sometime in Q1 2017, while the 10.5-inch and 12.9-inch iPad models will begin production in Q2 of this year. All of the new iPads are described as still being in the "planning" phase.

Although it was expected for Apple to announce and launch the new iPads during the Spring, the new report claims that "these tablets may not be announced or even released" until sometime in the second half of 2017. In December, "lower-than-expected" yield rates for the 10-nanometer manufacturing process was rumored to be a potential factor in a delayed launch for the new iPads.

Apple reportedly is planning three new tablets for 2017, a 9.7-inch iPad with a friendly price range, a 10.5-inch iPad, and an upgraded 12.9-inch iPad Pro. The products are still in planning, with the 9.7-inch model expected to enter mass production in the first quarter, and the other two in the second, according to sources from the related upstream supply chain.

However, these tablets may not be announced or even released in the market until the second half of 2017, the sources said.

In DigiTimes' report, the sources mentioned a 10.5-inch iPad, which is a size that was recently well-explained by Studio Neat designer Dan Provost as a logical choice for the middle-tier iPad. While multiple rumors placed the new iPad -- believed to be an iPad Pro -- somewhere in the 10-inch range, everything from a 10.1-inch to a 10.9-inch model has been reported.

According to the supply chain sources, the 10.5-inch iPad Pro is a contender to replace the price tier of the existing 9.7-inch iPad Pro, while the new 9.7-inch version will be introduced at an even lower cost to become an entry-level device, "mainly targeting the education sector."

As previously reported, DigiTimes' sources today reiterated that the higher-end 10.5-inch and 12.9-inch iPad Pro models will include an A10X processor. No mention was made of the 9.7-inch model and its processor, but analyst Ming-Chi Kuo last year predicted that the "low-cost" iPad would likely adopt a lower-end A9X processor.

The 10.5-inch iPad Pro is being positioned as a flagship model of the iPad line, believed to feature an edge-to-edge display without a home button, but retain a small portion of the top bezel in order to provide space for the front-facing FaceTime camera.