“Hon Hai Precision Industry Co., the biggest assembler of Apple Inc. products, said Friday its net profit last year rose 13%, helped by an increase in iPad and iPhone sales, as it also announced new investment and fundraising plans,” Lorraine Luk reports for The Wall Street Journal. “Taiwan-based Hon Hai, which earns more than 40% of its revenue from Apple, has been seeking new avenues of growth, as income from contract manufacturing slows. The company has been making a push into software development and telecommunications services, and has also branched out into the retail market by selling its mobile accessories under its own Coverbank brand.”
“Hon Hai said its net profit for the 12 months ended Dec 31 rose to 106.70 billion new Taiwan dollars ($3.50 billion) from 94.76 billion new Taiwan dollars a year earlier. Its revenue rose to 3.95 trillion new Taiwan dollars from 3.91 trillion new Taiwan dollars in 2012,” Luk reports. “Hon Hai’s results were underpinned by demand from Cupertino, Calif.-based Apple, which sold 51 million iPhones in its fiscal first quarter ended Dec. 28, 2013—up 7% from the same period the previous year… Apple also said it sold a record 26 million iPads in the quarter, compared with 22.9 million in the year-ago period.”
“Earlier this week, smaller rival Pegatron said its fourth-quarter net profit rose 22% as the company benefited from its growing role as an Apple assembler,” Luk reports. “Although Pegatron previously made some older iPhone models, last year was the first time Pegatron was the primary manufacturer of a new iPhone model, the 5C, according to people familiar with the matter.”
Read more in the full article here.
It would be a logical extension to have AAPL increase because of these stories; Wall Street is not logical however.
‘Coverbank’ I wish them luck in selling compelling products under that name.
“Chinese firms taking advantage of Apple” If Apple doesn’t find a way to reverse this trend they will be doomed to irrelevance.
Nailed it! Can I be a financial analyst too?