Next-gen and low-cost iPhone production? Foxconn now recruiting workers in Zhengzhou, sources say

“Foxconn Electronics (Hon Hai Precision Industry) started hiring workers for its plants in Zhengzhou, China at the end of March and some market watchers believe the recruitment is for Foxconn clients’ new products set for release in the second half,” Ninelu Tu and Joseph Tsai report for DigiTimes.

“Market watchers pointed out that recruitments are mainly for the company’s integrated digital product business group (IDPBG), which is charge of producing smartphones for a US-based brand vendor,” Tu and Tsai report. “Foxconn will reportedly start supplying a next-generation smartphone and an entry-level model to the client in the second quarter.”

Full article here.

MacDailyNews Note: Zhengzhou is a major site for iPhone assembly and also where Tim Cook visited a newly-built iPhone production plant run by the Foxconn Technology Group in Foxconn Zhengzhou Technology Park last March.

Related articles:
China’s Henan Province, home to main iPhone 5 assembly location, saw import-export revenue increase 58.6% YOY – January 16, 2013
Thousands line up for iPhone assembly jobs at Foxconn’s Zhengzhou, China plant – January 30, 2012
Apple CEO Tim Cook visits Foxconn’s iPhone plant in China – March 29, 2012
70% of iPhone production now comes from Foxconn’s Zhengzhou, China plant – May 25, 2012


    1. I see the potential for Apple to release a “lower-cost” iPhone to serve the pre-paid market where the handsets are either not subsidized, or minimally subsidized.

      I agree that Apple does not make “cheap” products. In recent years, however, the company has been more aggressive in competitively pricing its products and covering multiple price points (e.g., iPad lineup down to the shuffle).

      Apple has been gradually improving the “value” of the iPhone per its normal process – offering more functionality for the same price. However, the company is also savvy enough to drop products to lower price points on occasion, as it has done several times with its laptops. It has not been all that long since Apple created the retina MBP lineup, and the company is already dropping their price points as it expands and updates the lineup.

      Some people say that the last generation iPhone is the “low-cost” iPhone for the pre-paid market. While Apple has been retaining the previous two generations of iPhones at the release of each new version, and offering those at lower contract price points, I am not sure that will work for the pre-paid market. Even the much older iPhone 4 remains fairly expensive as a stand-alone, unsubsidized purchase.

      I believe that Apple will find a way to service a larger percentage of the world smartphone market while still keeping its distance from the low-end, feature phone space that Android handset peddlers are so willing to fill. The burning question is how much will Apple have to reduce gross margin to make that happen? I believe that is one of the big issues that has been troubling Wall Street for the past six months. If Apple is forced to reduce prices (and profit margin) to retain or expand market share, then that will directly impact the share price in terms of P/E.

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