The Foxconn technical group, Apple's biggest iPhone assemblar, aims to reduce costs by 20 billion yuan (2,900 million US dollars) by 2019, because it has "very difficult and competitive year". Company internal report
According to the memo obtained by Bloomberg, the iPhone business will have to reduce the cost of 6 billion yuan next year and the company plans to put up about 10% of non-technical staff. In the last 12 months, the company's expenditure is approximately 206,000 million yuan (US $ 6,700 million). Foxco refuses to comment.
It is likely that Foxconn's steps will increase the enormity of Apple's enclosure and the inputs suppliers for the iPhone, its most important product. In the last week, four suppliers on three continents reduced their income estimates due to weak demand. It has decreased the share of technology which has generally expanded in the recent days.
Due to weak iPhone demand in China and other emerging markets, Goldman Sachs cut its price target for Apple this month. Analysts warned "real risk" for projections to continue the current trends in road-hole.
On Tuesday, Apple ceased to bear market share, and closed more than 20 percent below the October top. In the same week last week, Luminaryum Holdings Inc., one of the less demanding suppliers, decreased by 33%, while AMS AG fell 22%. This week, as concerns spread, the S & P 500 erased its profits for 2018.
Founded in Taipei, Foxconn, China and the whole of the world collects everything from iPhones and laptops to Sony Corp's PlayStation. While the Foxconn smartphone market has been affected by a slowdown, professional tensions with the United States increase global uncertainty. Earlier this month, its main company, Hon Hai Prisión Industry Company, reported earnings of 12% of earnings.
According to the memorandum, the company will review the managers with a return of more than $ 150,000 annually. In other cuts, the Foxconn industrial internet company has a plan of 3 billion yuan-less plan plans, its subsidiary listed in Shanghai.
Apple has adjusted its strategy because the number of smartphones sold per year has declined. You can charge the highest price for each phone and get more money from services including digital videos, music streaming and data storage.
But most of its suppliers rely on large quantities of units to increase their professions and do not have a profitable backing plan because the industry's growth slows down. This has led to financial warnings on companies like Lumandum and Japan Display Inc.
Bloomberg Intelligence analyst Wu Jean Ho said, "Providers depend more on volume than Apple."