Electronic exports show strong growth
Sep-30-2010 By : agxadmin
China’s electronic exports jumped an annual 37.3% in the first seven months of this year. Exports of personal computers, still the major contributor to total electronic exports in the period, may slow because of a decrease in demand for the rest of this year. The reduced demand will influence the business of electronic manufacturers like Quanta Computer and Foxconn Technology Group. Worldwide computer sales are expected to expand 12% in 2011 compared with 18% this year, according to Taipei-based Capital Securities Corp. China’s PC exports surged 55.7% from the same period a year ago to USD50.8 billion. From January to July, the value of China’s electronic exports was USD313.5 billion, 36.9% of the national total export value. Component and material exports grew rapidly. In the seven-month period, electronic component exports jumped 67.1% to USD35.7 billion. Exports of electronic materials hit USD3.1 billion, an annual 67% growth. The top three export contributors were PCs, mobile phones and integrated circuits, the Shanghai Daily reports.
China still No 1 in Flextronics’ planning
By : agxadmin
Flextronics International expects China to remain its preferred base of production despite rising labor costs. It plans to hire about 20,000 Chinese workers next year after the opening of its power components manufacturing complex in Ganzhou in Jiangxi province at the end of August. It is also on track to launch its main computer products development center in the Wuzhong district of Suzhou in Jiangsu province by the end of the year. Chief Executive Mike McNamara said Flextronics had also made Shenzhen the site of a large production facility for advanced medical devices. “Despite the fact that wages have risen about 25%, China still provides lower cost [for contract electronics manufacturers] than other places,” McNamara said. Half of Flextronics’ more than 200,000 workers worldwide are located in China. “China probably remains my favorite place to manufacture in the world because of the good work ethic, a very sizable labor force, a lot of know-how, all components suppliers are there, and it has a great distribution system that reaches markets around the world,” he said.
Foxconn posts first half loss
By : agxadmin
Foxconn International Holdings is not expected to stage a strong recovery owing to the company’s high cost structure after posting a loss in the first six months of the year of USD142.64 million. Its Taiwanese parent company Hon Hai Precision Industry announced three wage increases in the past quarter that promise to more than double the average assembly line worker’s monthly salary to CNY2,000. The biggest of these raises takes effect in October. Foxconn is the worst-performing stock in Hong Kong’s Hang Seng Index this year. Revenue rose 2.12% to USD3.23 billion. Hon Hai reported an 11% year-on-year increase in second-quarter net profit to NTD16.7 billion and robust revenue totaling NTD654 billion. The group plans to hire 1.5 million employees in China in five years, as it relocates some of its production facilities from Shenzhen to the inland provinces of Henan and Sichuan, which are closer to employees’ homes. The Taiwan-headquartered company, which currently has 920,000 employees in its Shenzhen plants, will increase the ratio of its Chinese workers among its total work force to 66%.
Apple launches iPad and iPhone 4 in China
By : agxadmin
Apple has launched Wi-Fi iPads in China on September 17, starting from CNY3,988 for the 16GB model, CNY4,788 for 32GB and CNY5,588 for the 64GB iPad. The 3G iPad models, which support both 3G and Wi-Fi, have not yet been released officially on the Chinese market. Those prices are about 15% higher than the prices in the United States and Hong Kong. China Unicom, Apple’s domestic partner, also started selling the iPhone 4 16G through a deposit of CNY5,880 as an upfront fee with a two-year contract. The 32G will cost CNY6,999 for the same two-year contract. Finally, Apple also released a new family of iPods. Apple’s revenue in China grew about 200% year on year in the six months ended March, to USD1.3 billion, or 4.4% of the United States-based company’s global turnover in that period. The iPhone’s appeal has resulted in sharp growth in demand for Apple’s Macintosh desktop and laptop computers in China, where it shipped 115,000 units in the second quarter this year, up from 50,000 units in the same period a year earlier. Apple also announced plans to expand the number of its own retail stores in China to 25 from the existing four – two of which have been recently opened – and the number of authorized domestic resellers to 2,000 from 1,200.
China Unicom received more than 10,000 pre-orders in Shanghai for the iPhone 4 while its stock only amounted to about 4,000 units for its more than 50 outlets. Suning received more than 9,300 pre-orders in Shanghai and had only 1,100 at its 25 major outlets in the city. China Unicom outlets in Shanghai saw queues of up to 100 customers. The iPhone 4 cost as much as CNY12,000 when it was first available on China’s gray market in June, but after the two companies announced the official price for the iPhone 4, the gray market price dropped
to CNY5,500. For customers, a lower price and a repair guarantee are the main reasons for buying an official iPhone 4. “Since China Unicom launched the iPhone in China in October 2009, user response has been very positive,” said Li Gang, Senior Vice President of China Unicom. The operator has sold more than 700,000 iPhones in China since it started cooperating with Apple in 2009. China Unicom did not reveal the timeframe for launching the 3G iPad in China.
According to a report by Deutsche Bank Equity Research Asia, Apple is seeking to enable broader iPhone adoption outside the China Unicom network. Thousands of iPhone 4’s were sold on the first day it became available on the Chinese mainland, through Apple’s four branded stores, China Unicom’s outlets and the Suning Appliance electronic retail chain. Apple also made unlocked iPones available to be used on China Mobile’s 2G network. They are not compatible with the 3G network based on the TD-SCDMA standard used by China Mobile. China Telecom is expected to launch a version of the iPhone compatible with its CDMA2000 3G network early next year.
Foxconn’s move to Zhengzhou praised
By : agxadmin
A month after Foxconn started up its first production line in Zhengzhou, in inland Henan province, employing 2,000 workers, the company aims to recruit 100,000 people in Henan by year’s end – and a total of 300,000 in the next few years. The successful move by Foxconn is an example of the central government’s plan to move labor-intensive factories away from polluted and crowded coastal areas to the vast interior, allowing more developed areas to move higher up the value chain with more capital-intensive industries. As an added benefit, migrant workers can also find work closer to home. Foxconn alone is expected to double Henan’s export value next year.
The authorities say Foxconn’s Zhengzhou plant will make Apple iPhones and be capable of producing 200,000 units a day next year. Its exports will be worth USD13 billion annually – more than the province’s total last year. It is expected thousands of other companies, including suppliers and logistics service providers, will follow Foxconn to Henan as labor shortages, soaring wages and land prices make the Pearl River Delta less attractive. Foxconn says about 130,000 workers will have to be sent to Shenzhen for training to be ready to work in its new plant in Zhengzhou by the end of next year. Foxconn’s recruitment drive in Henan has received a massive response even as its factories in Shenzhen have been plagued by a string of suicides. Foxconn plans to pay its Zhengzhou workers a basic salary of CNY850, which will rise to CNY1,600 to CNY1,800 if overtime pay and bonuses are included. That is still about CNY600 less than their counterparts in coastal provinces earn, but higher than at Zhengzhou factories. Foxconn also plans to invest billions in a new base in Chengdu, Sichuan province, where another 100,000 people will be hired, the South China Morning Post reports.
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