Apple-concept firms expect to see strong sales in third quarter

By Kathryn Chiu ,The China Post

TAIPEI, Taiwan — As Apple reportedly placed a big-ticket order for new iPhone units recently, local companies involved in the supply chain — Apple-concept companies — are expected to see stronger sales in the third quarter. Local media earlier cited sources in the People’s Government of Henan Province to report that the chief Apple supplier, Foxconn Technology (富士康科技), is currently conducting a massive staff recruitment in Foxconn’s production base in the western Chinese province. Foxconn Group, widely known as Hon Hai Precision Industry (鴻海精密) in Taiwan, is the world’s largest electronics manufacturing services provider.

US$1 Billion in Imported Equipment The government source also revealed that Foxonn has imported manufacturing equipment worth US$1 billion in June, gearing up to fulfill Apple’s blockbuster orders for nearly 120 million new iPhone units in 2014. Up to 100,000 new workers will be recruited for Apple’s 2014 iPhone orders. It is also understood by analysts that Foxconn will also manufacture the iPhone 5S and iPhone 5C. The report appears to support earlier indications that mass production of the iPhone will commence or already started this July as Foxconn received handset components worth US$1 billion last month. This coincides with earlier leads that the 64-bit A8 processing chip for the iPhone 6 was delivered as early as June 2014 by Taiwan Semiconductor Manufacturing Company (TSMC,台積電) to numerous assembly plants contracted by Apple in China. Prior to Foxconn’s ramped up manufacturing mode, another Apple manufacturing partner, Pegatron Corp. (和碩聯合), was also reported as gearing up for its share of the iPhone 6 production contract, which is said to be around 20 percent of the total orders that the iPhone maker has awarded. The rest, or 80 percent, will be manufactured by Foxconn. Meanwhile, Advanced Semiconductor Engineering Group (日月光半導體), a leading IC tester and packager, and subcontractors from other sectors have also seen their production capacity increasingly booked by orders for parts and components for the iPhone 6. However, Catcher Technology Co. (可成科技), a contract supplier of iPhone housings, has reportedly failed to pass Apple’s certification for the 4.7-inch iPhone 6 model, leading to a shipment delay that will certainly dampen sales to some extent. The crux of the certification failure, insiders say, is the poor quality of the junction between plastic and metal in the housing during trial production, believed to have resulted from erroneous anodization that will take two to three months to fix.

New iPhone Released in September The next iPhone is believed to be set for a grand rollout either on Sept. 19 or 25 this year. According to local media reports, well-connected KGI Securities (凱基證券) analyst Kuo Ming-chi (郭明池) recently predicted that the 2014 launch will only be for the 4.7-inch build that is the replacement for the 4-inch iPhone 5S. The 5.5-inch phablet-size model will come out later, Kuo claimed, citing production issues that will delay its debut. The KGI Securities analyst offered a late 2014 outing for the larger iPhone 6, though he did not discount the possibility of a push back as far as January 2015 if only to ensure that sufficient supplies will be on hand once the device hits store shelves worldwide. Originally scheduled to hit the market at the end of this year, the 5.5-inch model is seen as likely to cause another wave of enthusiasm among iPhone fans and fuel the upcoming iPhone 6 boom, given that the previous iPhone editions have received criticism for having a smaller screen size than competitors, Taiwan-based Digitimes reported.