- Tram Ho
Almost every Apple partner has to accept the ruthless stinginess of the world’s most valuable company, but they also try to find ways to make more profit without losing their huge customers. this. Even their own partner, who has been with Apple for decades, Foxconn is no exception.
In the midst of accepting an erratic relationship with Apple, Foxconn has used a variety of tricks to cut costs and increase profits, a new report by The Information shows.
The years-long partnership between Apple and Foxconn is slowly eroding
For example, when it entered the production phase of the iPad Pro 2018, Foxconn told Apple that it needed to hire more workers – even if it was not necessary – in order for Apple to pay more for the labor generated. this. According to some Foxconn employees, the manufacturer often does so to increase its fragile margins or gain more orders to manufacture some new Apple product line.
Although the Apple – Foxconn couple have been together for decades now and both have brought success and reputation to each other. But over time, profits are dividing them in two different directions. While Foxconn still struggles with fragile single-digit annual profits, Apple is growing at 40%.
Therefore, Foxconn has to find a way to add to the fragile profit mentioned above. Besides reporting the number of workers needed, Foxconn also tried other measures to increase profits. Foxconn also uses Apple’s own devices for customers as well as skipping some steps in the process of testing components and products.
As a result, Apple must increase monitoring and monitoring of Foxconn employees and their own equipment in its manufacturing facilities. Since Tim Cook replaced Steve Jobs as Apple CEO, the Cupertino tech giant’s need for production audit and oversight has increased dramatically.
In 2015, Foxconn used unused Apple devices to make products for Huawei. The device was then returned to its original location before Apple did a test of Foxconn’s production line. According to former Apple and Foxconn employees, this activity has become more and more difficult as Apple begins to add tracking tags to its own devices.
As another example, a piece of metal or a loose screw was found inside an iPhone while on a production line. Foxconn employees should have discarded these defective products and made a completely new one with other parts, however, Foxconn workers would open them up and remove the piece of metal themselves.
The world’s largest electronics outsourcing company is also looking for other ways to increase its profits. Over time, Foxconn has acquired many Apple component suppliers. They also research and manufacture some of the components themselves to replace imported products – and pocket the cost savings.
Images of the changing and rifting relationship between Apple and Foxconn have also been presented in many different ways.
Before the release of the 12-inch MacBook, Apple accused Foxconn of letting Google employees go ” visiting a factory in China that makes the metal frame of the 12-inch MacBook .” Apple asked Foxconn to hand over security videos and log in and out, but Foxconn refused to do so.
Ms. Grace Wang, founder of Luxshare, and Apple CEO Tim Cook visit an iPhone components factory.
All of these incidents are coming at a time when Apple and other companies are both diversifying their supply chains. Foxconn used to have exclusive rights to assemble Apple products, but now more companies are involved in the activity, including Pegatron, Wistron and Luxshare. Many of these companies are also instructed by Apple to apply lessons about production or how to mobilize workers at peak times – things Apple learned from Foxconn itself.
In 2020 amid the outbreak of the corona virus outbreak, Foxconn’s revenue plunged 2.7%, while Apple’s grew 11% year-on-year.
Foxconn is too dependent on Apple and now has to find a place for itself, most recently with the launch of a chassis for electric vehicles, said Seamus Grimes, a professor at the National University of Ireland. so that other partners can customize according to their needs.
Refer to AppleInsider
Source : Genk