|Bid||23.20 x 0|
|Ask||23.25 x 0|
|Day's Range||23.05 - 23.30|
|52 Week Range||20.50 - 25.55|
|Beta (3Y Monthly)||0.32|
|PE Ratio (TTM)||15.19|
|Earnings Date||Nov 12, 2019|
|Forward Dividend & Yield||1.50 (6.51%)|
|1y Target Est||25.75|
(Bloomberg) -- Shipments of Apple Inc.’s popular AirPods wireless earphones are expected to double to 60 million units in 2019, according to people familiar with the Cupertino-based company’s production plans. This has been driven in part by “much higher” than expected demand for the pricier AirPods Pro model unveiled in October.The $249 AirPods Pro -- which offer noise cancellation and water resistance -- have surpassed expectations and demand for them is pushing Apple’s assembly partners against capacity and technical constraints, a person familiar with the matter said. Multiple suppliers are competing for the business of manufacturing the Pro earphones, though some are still building up the technical proficiency. There’s currently a wait time of two to three weeks for the AirPods Pro on Apple’s U.S. website.The most advanced form of wireless headphones is called “true wireless,” defined by the absence of a wire not just between the headphones and the music source but also between the two earbuds -- and the AirPods are the category-leading example. Taiwan-based Inventec Corp. and China’s Luxshare Precision Industry Co. and Goertek Inc. manufacture the AirPods for Apple.Apple spokeswoman Trudy Muller declined to comment on the product’s shipments.The pickup in AirPods sales this year has been helped by the launch of two new iterations: the Pro model in October and a $199 upgraded version of the original in March. The first AirPods were released in 2016. The runway is also mostly clear for Apple to have a successful holiday season, with Microsoft Corp. delaying its rival true wireless buds until spring and Google also not launching its new model until 2020.At the end of August, Apple was the clear leader in the global true wireless earphones market, according to Counterpoint Research. AirPods shipments have dwarfed every alternative and the Beats Powerbeats Pro, another Apple product, also feature in the top 10 sellers. While Samsung Electronics Co.’s Galaxy Buds have emerged as a recognizable competitor, Apple moreover ranked as the most preferred brand for future purchases of true wireless headphones in the U.S., the researchers said.“Apple also edged rivals because true wireless as a category is the preferred choice over wireless earphones, due to factors like better sound quality, portability, and ease of use,” Counterpoint analyst Pavel Naiya wrote on Sept. 26.Wearables like the AirPods and Apple Watch have become a crucial growth driver for the Cupertino company, which is adapting to plateauing iPhone demand in a mature smartphone market. In the past quarter, Apple’s iPhone sales shrunk to $33.4 billion from the prior year’s $36.8 billion, whereas the Wearables, Home, and Accessories segment -- composed of the Apple Watch, AirPods, Beats, HomePod and Apple TV groups -- generated $6.5 billion in revenue, growing by 54%.Total shipments of the AirPods Pro for the year will be determined by how well and how quickly the assemblers overcome the production challenges they currently face. If the overall AirPods range hits 60 million units in 2019 as is now expected, Apple should retain its 50% share of the true wireless market, which Counterpoint expects to surpass 120 million shipments for the year.\--With assistance from Mark Gurman.To contact the reporter on this story: Debby Wu in Taipei at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Two American consumer electronics companies said this week that they’re looking to shift manufacturing away from China and into other countries, citing pressures from import tariffs on their products amid the trade war.Fitbit Inc. said on Wednesday that it would stop Chinese manufacturing of its health trackers and smartwatches by January. Tile Inc. said it’s also considering plans to make its Bluetooth-enabled location trackers in other countries, after the company was hit with tariffs last month.“The biggest challenge for a company like Tile is our ability to plan for shifting changes in U.S. policy toward China,” said Chief Executive Officer CJ Prober. “With recent impacts, we are looking at other regions.”Tile on Tuesday added a new sticker to its lineup of tracking devices that help customers keep tabs on keys, wallets and the like, and raised $45 million in funding in its last round of funding earlier this year. The gadget maker does the majority of its manufacturing in China, but as the U.S.-China trade war has escalated, it’s now considering Mexico, Malaysia, Vietnam and “possibly the U.S.” as future manufacturing hubs, Prober said.“We are re-evaluating our entire supply chain and how we do what and where,” he said, adding that in recent weeks, Tile had dedicated an “entire team” to the task of traveling to different cities and evaluating manufacturing facilities. In a sign of concern from investors about the potential costs of relocating these operations, shares of San Francisco-based Fitbit fell as much as 2% Wednesday after announcing the move from China.Several U.S. companies, long accustomed to using China as a manufacturing base, are now looking to reduce their exposure to the country. Last year, GoPro Inc. announced it would move much of its U.S.-bound camera production out of China to avoid potential tariffs, and has largely accomplished that goal, according to a spokesman. In August, HP Inc.’s laptop maker Inventec Corp. said it will shift production of notebooks for the U.S. market away from China. Apple Inc. has been doing battle with the White House over requests to get the iPhone and other products off the list of Chinese-made goods slated to be hit with tariffs on Dec. 15.The latest $300 billion round of duties will impact essentially all remaining Chinese imports—with some exceptions, though details around which imports will be exempted are still unclear. Trade policy between the world’s two largest economies is still in flux. Chinese Vice Premier Liu He is set to visit the U.S. this week for further trade talks.“We are supportive of the overall policy” of the U.S. in its negotiations with China, Tile’s Prober said. But “what’s been challenging is the implementation of that policy.” The company “only got a few weeks’ notice” that its products would be subject to new tariffs before they went into effect in September, he said. (Updates with Fitbit news in the second paragraph.)To contact the author of this story: Candy Cheng in San Francisco at email@example.comTo contact the editor responsible for this story: Anne VanderMey at firstname.lastname@example.org, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- News that the U.S. government accepted some and rejected other tariff-exemption requests by Apple Inc. offers a veneer of triumph both for Tim Cook and President Donald Trump. As a result of the decision, the company could have to shell out more for components of the Mac Pro. It also means the victors from this charade are neither Texas – where the computer will be assembled – nor China, where the parts will be sourced. More likely, countries such as Vietnam, Mexico and Taiwan will reap the spoils, as they’ve done throughout the trade war.Companies including HP Inc. and Dell Inc. have been looking to shift their supply chains as the Trump administration tries to wean American companies from their reliance on Chinese suppliers. Officials have also allowed companies to apply for exemptions.According to the U.S. government, these exclusions are granted based on three factors: Whether the item is available only from China, and whether it (or a comparable product) is available in the U.S. or a third country Whether the additional duties on this item would cause severe economic harm to the applicant, or other U.S. interests Whether this item is strategically important, or related to Chinese industrial programsYet a look at the Mac Pro components that made the cut and those that didn’t shows just how random this game really is. Accepted: Structural frame for an automatic data processing machine comprised of stainless steel vertical bars, aluminum top bridge plate and bottom plate, and stainless steel feet. Translation: No tariff on the Mac Pro frame.Rejected: Modular caster wheel assembly. Translation: Tariffs to be paid on the Mac Pro’s optional wheel set.A metal PC case probably won’t advance China’s semiconductor industry, but the notion that Apple cannot source that “stainless steel space frame” anywhere in the world but China beggars belief. Given that the U.S. is known to churn out civilian, military, and interplanetary aircraft, the revelation that it cannot sculpt a few feet of metal to hold an 18-kilogram (40-pound) computer must be of profound disappointment to Donald Trump’s America.The list of five items that were rejected reveals something else, too: Not one of them is deeply dependent on China as a supplier. Denied from exemption are a data cable, a power cable, a central processor heatsink, a printed circuit board and that wheel assembly.One possible provider for the power cable is Taipei-based Delta Electronics Inc., which already supplies to Apple from factories in China, Taiwan and Thailand. It plans to invest $1.8 billion in Taiwan to boost production and R&D. Delta is part of a growing repatriation trend: When Inventec Corp., a maker of laptops and Apple Airpods, realized that making U.S.-bound computers in China was a liability it chose to move its factories out – not to the U.S., as Trump intended, but to Taiwan.Apple’s data cable, meanwhile, could be sourced from Taiwan’s Cheng Uei Precision Industry Co., also known as Foxlink, which has factories in Taipei as well as Vietnam, India, Myanmar and the U.S.The remaining items on that Apple tariff list are rather generic, meaning there are dozens of companies Apple can turn to. While most of those alternate suppliers are expanding their non-China footprint, few are increasing their U.S. presence.Mexico, for example, was home to seven Apple sourcing factories in the company’s 2018 Supplier Report published this year, compared with just three sites two years earlier. Even China’s GoerTek Inc. is considering making Airpods in Vietnam, Nikkei reported in July, a move that would skirt U.S. tariffs without creating American jobs or saving Chinese ones.That Apple even bothered trying to get tariff exemption on a set of wheels tells us that it didn’t try very hard to buy them anywhere else. It also shows the company expects that the low volume of Mac Pro shipments wouldn’t justify wasting time finding a new manufacturing partner (Macs, including laptops and desktops account for less than 10% of Apple revenue). It probably cost them as much to hire Baker & McKenzie lawyers to draft and submit the tariff exemption paperwork as they’d save in taxes.The good PR that comes from stamping “Made in America” on their computers, however, is worth more than any lawyer.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Even the unseasonable downpour couldn’t dampen the spirits of the executives and officials gathered on the Indonesian island of Batam to cut the ribbon on a new Pegatron Corp factory. The men exchanged jokes as they took shelter under a white canopy, and when company vice chairman Jason Cheng pledged to hire hundreds of locals, the assembled audience erupted in applause.This low-key July ceremony to launch a manufacturing outpost marked a critical first step into Southeast Asia for one of Apple Inc.’s most important suppliers. It also encapsulates a fundamental move of electronics production, set in motion by the escalating U.S.-China trade war, that may hurt the world’s No. 2 economy while enriching Southeast Asia and beyond.“Pegatron, and many more to come, is an opportunity,” Edy Putra Irawady, head of a local agency charged with enticing capital, told the crowd. “Batam has prepared various incentives to chase the opportunity and attract more investment.” Irawady is one of many making preparations for the most profound shift in global manufacturing since the advent of the made-in-China model in the 1980s: its potential dismantling.Trump’s flip-flops on trade, including a backtracking just this week on threats to slap punishing tariffs on $300 billion of goods, are spurring an exodus from China of manufacturers. Some recognize that U.S.-Chinese tensions won’t fade soon, while others are just tired of the uncertainty. In one of the most dramatic responses since Trump first brandished full tariffs, HP laptop-maker Inventec Corp. declared plans to move its entire U.S.-bound laptop operations from China to its home base of Taiwan within months. “The trade war is very painful for us,” President Maurice Wu said.Like Pegatron, the makers of the world’s electronics are increasingly rushing out of the way of Trump-administration tariffs on Chinese-made goods. Server motherboard makers for Google and Amazon.com Inc. are already shifting to Taiwan. Even Apple Inc., whose gargantuan Chinese production machine hires more people than any other private employer, is testing the waters. GoerTek Inc., for one, is trying out production of AirPods in Vietnam, people familiar said. A GoerTek representative declined to comment on the specifics of its Apple business but said the company will gradually make several products in both China and Vietnam.The U.S. president’s campaign of tariffs and export restrictions against Chinese champions like Huawei Technologies Co. threatens to up-end the production of the world’s electronics, from iPhones and laptops to 4K televisions. The decades-old supply chain is starting to split in two: one beyond China’s borders that serves American concerns, and another within the world’s most populous country that caters to local consumers.It’s something Foxconn’s billionaire founder, Terry Gou, calls “G2” or the emergence of two competing global standards created by China and the U.S. Gou -- who as Apple’s main production partner helped pioneer the made-in-China model -- has volunteered to “help the U.S. reshape a new supply chain.” Young Liu, Gou’s successor, told shareholders the company could make every U.S.-bound iPhone outside of China if it had to.While U.S.-based companies seek alternatives beyond mainland China, their counterparts in China likewise are “de-Americanizing” their supply chains, reducing their reliance on American core technology for fear they will suffer the same fate as Huawei. The company is now hunting for Asian and European component makers to reduce its dependence on U.S. firms from Google to Micron.In August, Huawei approved Taiwan-based wifi module maker RichWave Technology Corp. to supply parts that U.S. wireless semiconductor company Skyworks used to provide. Analysts including Kevin Chen of Taipei-based President Capital Management say Huawei is increasingly looking to Taiwan’s Win Semiconductors to manufacture radio frequency chips previously supplied by Skyworks and compatriot integrated circuits maker Qorvo.“Both U.S. and Chinese companies are diversifying their supply chains due to similar reasons -- to mitigate geopolitical risks,” said Gordon Sun, director of the Taiwan Institute of Economic Research’s Macroeconomic Forecasting Center.Mere months ago, it seemed as if China had a virtual lock on the business of making the world’s electronics -- an arrangement that benefited not just tech juggernauts from Dell Technologies Inc. to HP Inc. but also ensured jobs for millions across the country and fostered the growth of a massive domestic manufacturing industry.While there’s little chance that China will fully cede its mantle as the world’s electronics workshop anytime soon, the outward-bound trend is accelerating. That’s because the household names that built the technology industry’s global supply chain aren’t waiting to see how the conflict turns out.Delta Electronics Inc., which makes power and cooling components for clients like Microsoft Corp. and Huawei, is moving some production back to its home base of Taiwan and to Thailand. It’s also taking the unusual step of building three to four plants in India, responding to Prime Minister Narendra Modi’s Make-in-India program.Modi’s efforts to drive foreign companies to source components locally is showing success. Foxconn will start to churn out iPhones in the country this year after its print circuit board affiliate and Apple supplier Zhen Ding Technology Holding announced plans to invest there late last year. Luxshare Precision Industry Co., another Apple supplier, is considering moving some production of cables and connectors to India as well, according to people familiar, with one saying Apple made the request to the Chinese company. Calls to a number listed on the Luxshare website went unanswered and the company did not respond to an email seeking comment. Chinese smartphone brands including Huawei, Oppo and Xiaomi are all making handsets in India.It’s not just U.S.-China tension that keeps supply chain executives up at night. Politically motivated trade protectionism may be spreading. Japanese curbs on the export of vital chip- and display-making materials to South Korea -- the latest manifestation of lingering tensions stretching back to colonization by Tokyo and World War II -- threaten to further splinter the industry. If unresolved, that dispute may hinder efforts to sate the enormous appetites of Samsung Electronics Co. and SK Hynix Inc., expediting a production migration from Japan.Any shift won’t happen overnight. While moving assembly operations is unlike relocating a chip fabrication facility -- arguably the most expensive type of plant at $10 billion or more to set up from scratch -- the cost can run into millions of dollars and entails a plethora of issues from licenses to new regulations and hiring. That’s an additional burden that manufacturers with single-digit margins can ill afford.“Our net profit margin stands at a mere 1.4% in the first quarter. The tariffs are 25%. We simply cannot help our customers absorb those,” Quanta Computer Chairman Barry Lam said in May when talking about potential production shift and tariff impact.Despite Trump’s proclamations, the U.S. won’t get many of the jobs moving out of China. Taiwan and Southeast Asia are first in line to absorb any manufacturing exodus. Vietnam has become the largest beneficiary of the trade war in the 12-month period beginning in the first quarter of 2018, gaining 7.9% of GDP from trade diversion, Nomura said in a June 3 note.Batam, once a poverty-stricken corner of the Indonesian archipelago, is on the cusp of a boom thanks to abundant cheap labor and quick access to the adjacent trading hub of Singapore. Pegatron has poured $40 million into its newest Indonesian plant, which will produce networking gear for the U.S. market. It’s pledging to grow the workforce there from 40 people to as many as 1,800 eventually.“We’re very determined to invest more,” said Pegatron’s Cheng.\--With assistance from Gao Yuan, Arys Aditya and Adrian Leung.To contact the reporter on this story: Debby Wu in Taipei at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. HP Inc.-laptop maker Inventec Corp. said it will to shift production of notebooks for the U.S. market out of China within months, adding to the tech industry’s exodus as the world’s two largest economies escalate their trade war.Inventec plans to move its entire American-bound laptop operation to its home base of Taiwan within two to three months, President Maurice Wu said on a post-earnings call Tuesday. Wu’s company assembles Apple Inc.’s AirPods and produces notebook computers for HP, which accounts for an estimated third of its revenue.Underscoring the difficulty of making such long-term production decisions, President Donald Trump said just hours later that the U.S. would push back implementation of tariffs on Chinese-made laptop and other products to December from September. But tech companies aren’t waiting for a trade resolution. From Inventec to Apple-assembler Hon Hai Precision Industry Co., Taiwanese companies that make most of the world’s electronics are reconsidering their reliance on the world’s No. 2 economy as Washington-Beijing tensions simmer.“The trade war is very painful for us,” Wu said, concluding a call during which executives shared how production shifts have hurt the company’s efficiency and margins.Rising tariffs on Chinese-made products threaten to wipe out their margins and up-end a well-oiled, decades-old supply chain. Microsoft Corp., Amazon.com Inc., Sony Corp. and Nintendo Co. are said to be among those now weighing their options away from the line of fire, such as Southeast Asia and India. Alphabet Inc.’s Google has already shifted much of its production of U.S.-bound motherboards to Taiwan, Bloomberg News has reported.Inventec’s shift marks one of the most dramatic relocations since Trump announced his decision to slap 10% tariffs on $300 billion of Chinese imports -- including consumer gadgets from smartphones to notebooks -- originally slated for next month. Spurred on by clients, which include household names like Dell Technologies Inc. and Nintendo, many Taiwanese contract manufacturers are now drawing up contingency plans, shifting select assembly operations or exploring alternative venues.Analysts anticipate the tariff delay will have little impact on those plans.“While this announcement appears to provide incremental (and market-friendly) information as to how the White House is approaching trade policy, we do not believe it represents a substantial shift in the U.S.-China dispute,” Goldman Sachs analysts wrote in response. “Our broader expectation is that the U.S. and China are unlikely to reach a lasting agreement prior to the 2020 election that provides certainty around tariff rates on imports from China.”On Tuesday, Compal Electronics Inc. Chief Executive Officer Martin Wong said his company, a rival to Inventec, has also shifted some notebook lines to Taiwan and was considering investing more in Vietnam should tariff-conflicts persist. Quanta Computer Inc. Chairman Barry Lam told reporters Tuesday his company is definitely re-locating some business to Southeast Asia, though he didn’t mention a timeframe. Chief Financial Officer Elton Yang said Quanta will for now aim to satisfy customers’ demands for production outside of China with their Taiwan facilities.U.S. companies, long accustomed to using China as the world’s workshop, are looking to diversify their manufacturing operations as the uncertainty over volatile trade policy heightens and Beijing shows a willingness to clamp down on foreign firms within its own borders. It’s a shift that may herald a broader, long-term trend as Beijing and Washington continue to spar over everything from market access to trade.The trade war threatens to disrupt a complex global supply chain involving many countries beyond just China and the U.S. Many components that go into devices aren’t made in the U.S., despite being designed there. A phone chip designed by Apple may come out of a factory in Taiwan, then be packaged (a process that prepares it for integration into a circuit) somewhere else, before being shipped to China for assembly into an iPhone.Still, few major manufacturers have moved output in truly significant amounts and China’s status as the world’s production base for electronics is unlikely to diminish anytime soon. Foxconn Technology Group has said it has enough capacity to make all iPhones bound for the U.S. outside of China if necessary, although Apple has so far not asked for such a shift.(A previous version of the story was corrected to amend HP’s contribution to Inventec’s revenue)(Updates with Trump comments in fourth paragraph.)\--With assistance from Jeanny Yu.To contact the reporters on this story: Debby Wu in Taipei at email@example.com;Cindy Wang in Taipei at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
SAN FRANCISCO , August 9, 2019 PRNewswire/ -- Server manufacturer Inventec (TPE: 2356) proudly joined American semiconductor producer AMD in launching their latest AMD EPYC™ 7002 Series Processors in ...
(Bloomberg) -- Terms of Trade is a coming daily newsletter that untangles a world embroiled in trade wars. Sign up here. Apple Inc. has asked its largest suppliers to consider the costs of shifting 15% to 30% of its output from China to Southeast Asia in a dramatic shake-up of its production chain, the Nikkei reported.The U.S. tech giant asked “major suppliers” to evaluate the feasibility of such a migration, the newspaper cited multiple sources as saying. Those included iPhone assemblers Foxconn Technology Group, Pegatron Corp. and Wistron Corp., MacBook maker Quanta Computer Inc., iPad maker Compal Electronics Inc. and AirPod makers Inventec Corp., Luxshare-ICT and GoerTek Inc., Nikkei cited them as saying.China is a crucial cog in Apple’s business, the origin of most of its iPhones and iPads as well as its largest international market. But President Donald Trump has threatened Beijing with new tariffs on about $300 billion worth of Chinese goods, an act that would escalate tensions while levying a punitive tax on Apple’s most profitable product. Company spokeswoman Wei Gu didn’t respond to a request for comment.Two major Apple suppliers pushed back against the Nikkei report. The U.S. company has not asked for cost estimates for shifting production out of the world’s No. 2 economy, although suppliers are running the numbers on their own given the trade dispute, said one person familiar with the matter, asking not to be identified discussing internal deliberations. Another supplier said it too had not gotten such a request from Apple and that the Cupertino, California-based company had resisted a proposed production shift to Southeast Asia.Apple does have a backup plan if the U.S.-China trade war gets out of hand: Primary manufacturing partner Hon Hai Precision Industry Co. has said it has enough capacity to make all U.S.-bound iPhones outside of China if necessary, Bloomberg News reported last week.The Taiwanese contract manufacturer now makes most of the smartphones in the Chinese mainland and is the country’s largest private employer. Hon Hai, known also as Foxconn, has said Apple has not given instructions to move production but it is capable of moving lines elsewhere according to customers’ needs.Apple hasn’t set a deadline for the suppliers to finalize their business proposals, but is working together with them to consider alternative locations, the Nikkei said. Any move would be a long-term process, it cited its sources as saying.Beyond Apple’s partners, the army of Taiwanese companies that make most of the world’s electronics are reconsidering a reliance on the world’s second-largest economy as Washington-Beijing tensions simmer and massive tariffs threaten to wipe out their margins. That in turn is threatening a well-oiled, decades-old supply chain.Taiwan’s largest corporations form a crucial link in the global tech industry, assembling devices from sprawling Chinese production bases that the likes of HP Inc. and Dell then slap their labels on. That may start to change if tariffs escalate, an outcome now in the balance as Washington and Beijing spar over a trade deal.Apple is an outsized figure in that negotiation. The high-end iPhone, which accounted for more than 60% of the company’s 2018 revenue, drives millions of jobs across China as well as a plethora of different industries from retail to electronics. The country is also a major consumer market in its own right, yielding nearly 20% of last year’s revenue -- weakness there pushed Apple to cut its sales forecast in January.“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market,” Hon Hai board nominee and semiconductor division chief Young Liu told an investor briefing in Taipei last week. “We have enough capacity to meet Apple’s demand.”(Updates with a source’s comments from the second parapraph.)To contact the reporter on this story: Debby Wu in Taipei at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.