4938.TW - Pegatron Corporation
| Previous Close | 64.50 |
| Open | 64.10 |
| Bid | 64.60 x 0 |
| Ask | 64.70 x 0 |
| Day's Range | 63.50 - 65.00 |
| 52 Week Range | 46.95 - 71.50 |
| Volume | 6,326,000 |
| Avg. Volume | 5,518,484 |
| Market Cap | 166.359B |
| Beta (5Y Monthly) | 0.56 |
| PE Ratio (TTM) | 11.88 |
| EPS (TTM) | 5.45 |
| Earnings Date | Mar 12, 2020 - Mar 17, 2020 |
| Forward Dividend & Yield | 3.50 (5.43%) |
| Ex-Dividend Date | Jul 31, 2019 |
| 1y Target Est | 58.90 |
- Bloomberg
Apple Suppliers Aim to Resume Full China Production Feb. 10
(Bloomberg) -- Apple Inc.’s major suppliers in China, including iPhone-maker Hon Hai Precision Industry Co., plan to resume full-scale production in the country Feb. 10, despite the coronavirus that has infected thousands and limited travel.Foxconn’s Hon Hai, the most important manufacturer for the U.S. company, said Tuesday it still expects to be able to restart facilities throughout China on schedule, according to a text message sent to Bloomberg News. Suppliers such as Quanta Computer Inc., Inventec Corp. and LG Display Co. also said they would go back to work next week in China.While Chinese officials and companies have targeted Feb. 10 as the date to resume work in much of the country, doubts about the timing have grown in recent days as the virus death toll rises, workers find themselves stuck in municipal lockdowns and the transport of people and goods has been hampered. More than 20,000 people have been infected with the virus and more than 400 have died.Virtually all of the world’s iPhones are made in China, primarily by Hon Hai at its so-called iPhone City in Zhengzhou and by Pegatron Corp. at an assembly site near Shanghai. Each of those locations is more than 500 kilometers away from Wuhan in central China, the epicenter of the viral outbreak.“The main variable is whether the government will push back the time for resuming production, though it is not very likely given the complexities of organizing transportation for the returning migrant workers,” said GF Securities analyst Jeff Pu. He added that any potential labor shortage is a serious issue that weighs on the minds of suppliers.Apple said this week that it would close its corporate offices, stores and contact centers in mainland China through February 9, out of an “abundance of caution and based on the latest advice from leading health experts.” Last week, Apple reported holiday-quarter revenue that beat Wall Street expectations on rebounding iPhone demand, sending its shares to a record. It issued a forecast that was wider than usual due to uncertainty created by the spread of the virus. An Apple spokesman referred questions to Cook’s remarks last week that the company is monitoring developments in China closely and working with employees and partners in the region.Apple has roughly 10,000 direct employees in China, across its retail and corporate entities. Its supply chain also has more than a million workers manufacturing products like the iPad, iPhone and Apple Watch.\--With assistance from Mark Gurman.To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Apple Holiday Results Top Estimates on Rebounding iPhone Demand
(Bloomberg) -- Apple Inc. shares jumped to a record high Wednesday after reporting holiday-quarter revenue that beat Wall Street expectations on rebounding iPhone demand and surging sales of wearable devices.The results are a remarkable comeback from a year ago, when the most valuable technology company missed its own targets. A sales forecast for the current quarter also exceeded analysts’ projections, while services revenue came in slightly below expectations.The shares, which have more than doubled over the past year, gained as much as 3% to $327.25 at 9:37 a.m. in New York. That’s the highest intraday valuation since the stock started trading in the 1980s, according to data compiled by Bloomberg.“The strength is coming from the iPhone and continued really strong growth in wearables and the App Store,” said Shannon Cross of Cross Research. “The iPhone was very strong.”The Cupertino, California-based company reported $91.8 billion in revenue for the fiscal first quarter, up 9% from a year earlier. Wall Street was looking for $88.4 billion, according to data compiled by Bloomberg. Profit was $4.99 a share, also beating analysts’ expectations.For the fiscal second quarter, Apple said sales will be between $63 billion and $67 billion. Analysts estimated $62.3 billion, on average.After years of rapid growth, Apple’s expansion has slowed as demand for smartphones waned and competition from Chinese rivals intensified. Under Chief Executive Officer Tim Cook, the company’s strategy has evolved. It now aims to sell new handsets to customers every three to five years, and then offer as many services and accessories as possible in the intervening years.On Tuesday, Cook said Apple saw “strong demand” for the latest iPhones and noted that a base of more than 1.5 billion devices has been “a great driver of our growth across the board.”Cook addressed the coronavirus during a conference call with analysts, saying Apple is following developments in China. The company is working closely with employees and partners in the region, he added. Virtually all iPhones are made by Foxconn’s Hon Hai Precision Industry Co. in Zhengzhou, China, and by Pegatron Corp. at an assembly site near Shanghai.Chief Financial Officer Luca Maestri said the revenue range projected for the fiscal second quarter was wider than usual due to uncertainty created by the spread of the virus.Apple Supply Chain Braces for Disruption From CoronavirusAnalysts have been particularly excited about wearable accessories, such as the Apple Watch and AirPods.However, the iPhone still generates the majority of Apple’s revenue. And this crucial business has improved from a dire performance in last year’s holiday period. The iPhone 11 and 11 Pro models were well received in their debut in the fall and demand in China has been particularly strong, outselling 2018’s releases in a market that has otherwise been shrinking.Apple Is Raising TSMC Chip Orders to Meet Strong IPhone DemandApple generated $56 billion in revenue from the iPhone in the fiscal first quarter, up 8% from a year earlier. That was a lot better than the 2018 holiday period, when sales of the handset dropped about 15%. Apple cut the price of its entry-level flagship iPhone by $50, luring buyers. There are also millions of older iPhones that are losing software support from the company, spurring new purchases.Apple’s Lower Prices, Users’ Aging Handsets Drive IPhone DemandWearables, including AirPods, and other accessories generated $10 billion in revenue in the holiday quarter, up 37% from a year ago.The company reported Services revenue of $12.7 billion, up 17% from the same period last year. That missed analysts’ forecasts. This business still mostly relies on older offerings such as the App Store, iCloud storage and Apple Music. It’s unclear how well Apple TV+, the Apple Card and the Apple Arcade gaming subscription are performing, but there have been signs of weak demand for Apple News+, the company’s digital magazine subscription.“One note of caution in an otherwise strong report was that Services, which included Apple TV+, grew slightly below expectations,” said EMarketer principal analyst Yoram Wurmser. “This miss could be attributed to the competition from Disney+, which launched at roughly the same time.”Bob Iger Takes the Gloves Off for Disney’s Streaming Debut(Updates with share gains starting in the third paragraph)To contact the reporter on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Amy ThomsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Apple Supply Chain Braces for Disruption From Coronavirus
(Bloomberg) -- Apple Inc.’s China-centric manufacturing base is at risk of disruption after the Lunar New Year holiday as the company’s partners confront the coronavirus outbreak that has gripped the country and caused more than 100 deaths.Virtually all of the world’s iPhones are made in China, primarily by Foxconn’s Hon Hai Precision Industry Co. at its so-called iPhone City in Zhengzhou and by Pegatron Corp. at an assembly site near Shanghai. Each of those locations is more than 500 kilometers away from Wuhan in central China, the epicenter of the viral outbreak, but that distance doesn’t immunize them from its effects.“I can’t imagine a scenario where the supply chain isn’t disrupted,” said veteran industry analyst Patrick Moorhead of Moor Insights & Strategy. “If there’s one major hiccup in the raw materials, fabrication, assembly, test, and shipping, it will be a disruption.”Investors and analysts will be looking to Chief Executive Officer Tim Cook to comment on the virus and its impact on Apple during Tuesday’s conference call to discuss the latest quarterly financial results. Cook tweeted over the weekend that Apple “will be donating to groups on the ground helping support all of those affected” by the virus.Apple has been increasing production to meet higher-than-anticipated iPhone demand, Bloomberg News reported last week. The company typically launches its new high-end iPhones around September, so the virus is unlikely to have meaningful impact on those plans, however the company is also preparing to begin mass production of a new low-cost iPhone in February, which is more at risk.Apple has roughly 10,000 direct employees in China, across its retail and corporate entities. Its supply chain also has a few million workers manufacturing products like the iPad, iPhone and Apple Watch. Many of those employees have been home the past few days for the holiday, and the company hasn’t said if it is asking them to stay home for longer to prevent the virus spreading. Chinese authorities have imposed severe travel restrictions and taken the drastic step of quarantining the entire city of Wuhan, a population of more than 11 million.“Supply chain disruption is a worry if employees across Foxconn and other component manufacturing hubs in China are restricted,” said analyst Dan Ives of Wedbush Securities Inc. “If the China outbreak becomes more spread it could negatively impact the supply chain which would be a major investor worry.”An Apple spokeswoman declined a request for comment.Foxconn said it is monitoring the situation in China and following all recommended health practices. It declined to comment on production in specific locations but said, “We can confirm that we have measures in place to ensure that we can continue to meet all global manufacturing obligations.”Confirmed cases of the coronavirus are rising in Henan province -- home to Zhengzhou facility -- which may lead Hon Hai or the government to close factories to prevent further contamination, Bloomberg Intelligence analyst Matthew Kanterman wrote. The province accounted for a quarter of China’s smartphone exports last year, while China’s exports make up 27% of global smartphone sales, he said, citing government and IDC data. Foxconn is estimated to account for more than 60% of Henan’s total trade.The Cupertino, California-based company prepares for extreme scenarios such as the coronavirus by mandating that major components be dual-sourced -- both in terms of vendors and geography -- and a major immediate impact to its production plans is unlikely for now, according to a person familiar with its operations. Even so, the vast majority of its assembly work is done in China, and so a shortage of workers for assembly lines will have a direct impact on shipment numbers.Apple put the redundancy policy in place after the 2011 earthquake and tsunami that hit Japan and led to component constraints for the iPad 2 that the company launched that year.While Apple doesn’t have any stores in Wuhan, it does have dozens of retail locations across the Chinese mainland. The company hasn’t announced any closures yet, however it has shortened the opening hours of several stores in the country through Feb. 7, according to a review of its retail website. That shift could be due to the Chinese government extending the lunar holiday as a means to control the virus.Along with its local workforce, Apple also relies on many of its U.S. staff going back and forth across the Pacific Ocean, with United Airlines Inc. last year revealing the company was spending $35 million per year flying employees between San Francisco and Shanghai alone. That included 50 daily business-class seats, according to the airline. How the virus outbreak may affect the research and development efforts that those trips facilitate has yet to be established.To contact the reporters on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.net;Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
New Low-Cost iPhone to Enter Mass Production in February
(Bloomberg) -- Apple Inc. suppliers plan to begin assembling a new low-cost iPhone in February, people familiar with the plan said, as the company looks to address a wider swath of the global smartphone market ahead of its 5G handsets later this year.The Cupertino, California-based company is expected to officially unveil the new phone as early as March, one person familiar with its road map said. The assembly work for the new handset will be split among Hon Hai Precision Industry, Pegatron Corp. and Wistron Corp., the people added.This will be the first lower-cost iPhone model since the iPhone SE. It will look similar to the iPhone 8 from 2017 and include a 4.7-inch screen, Bloomberg News has previously reported. The iPhone 8 is still on the market, currently selling for $449, whereas Apple sold the iPhone SE for $399 when that handset launched in 2016.The new phone is expected to have Touch ID built into the home button, reusing established Apple technology instead of opting for an in-display fingerprint sensor like most modern Android rivals. It will not have Apple’s Face ID biometric authentication, but it will feature the same processor as Apple’s current flagship device, the iPhone 11.An Apple spokeswoman declined to comment.Apple Expects IPhone Shipments to Return to Growth in 2020Apple’s more affordable iPhones have proven popular with consumers, including the latest iPhone 11, whose starting price was $50 lower than Apple’s typical pricing. Strong demand for iPhones has prompted Apple to ask Taiwan Semiconductor Manufacturing Co. to make more chips in the current quarter, according to two people familiar with the matter.Shares in Japan Display Inc., which supplies LCD screens for Apple’s lower-tier iPhones, closed 1.35% higher on Wednesday.Apple is planning a slew of new high-end iPhones for release later in 2020 that include 5G connectivity, faster processors, and new 3-D cameras on the back, Bloomberg News has reported.A cheaper offering may help Apple better compete in the most price-competitive and fast-growing emerging phone markets, particularly India. iPhones are still a hard sell in the country, which is overrun by aggressively-priced Android rivals coming in at less than $200. Still, Apple has shown a will to carve out a niche for itself and is eyeing locations for Apple stores within its borders.The U.S. tech juggernaut is hoping its handset shipments will return to growth this year, having set itself the goal of shipping more than 200 million units in 2020. The successor to the iPhone SE will play a significant role in that task.(Updates with Japan Display share price move)To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Apple Partner Pegatron to Set Up Production in Vietnam
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Taiwan’s Pegatron Corp. plans to set up production facilities in Vietnam, according to people familiar with the matter, becoming the latest Apple Inc. assembly partner to establish a presence in the Southeast Asian nation as they diversify beyond China.Taipei-listed Pegatron is looking for a site to build a brand new facility in the north of the country, according to people familiar with the matter who asked not to be identified discussing private plans. It already has rented a separate facility in the northern city of Haiphong, they said. Pegatron will make styluses for Samsung Electronics Co.’s smartphones there, one of the people said. The gadget manufacturer’s share price remained largely unchanged in Tuesday trading.Pegatron joins Apple’s two other iPhone assemblers -- Wistron Corp. and Hon Hai Precision Industry Co. -- in developing manufacturing facilities or building extra capacity in Vietnam. None of the three are making iPhones in Vietnam and have no imminent plans to do so. The only Apple device Pegatron makes is iPhones. GoerTek Inc. is now making AirPods in the country, while two other Apple assembly partners, Compal Electronics Inc. and Luxshare Precision Industry Co., also have a presence in Vietnam.An almost two-year-long trade war with the U.S. has put China’s position as factory for the world of technology in jeopardy, undermining a decades-old global supply chain and pushing electronics companies to look for alternative production bases. Though Washington and Beijing have signed a phase-one trade deal, supply-chain diversification is still essential in the longer term given tensions are unlikely to fully subside and labor costs are rising in China.Taiwanese companies have been particularly active in their search for options, with companies from Inventec Corp. to Foxconn Technology Group either moving production back home or to more distant regions around Asia, seeking to escape U.S. tariffs.Vietnam has been a top beneficiary from tariff-related trade diversions. Indonesia has also gained, including garnering investment from Pegatron.“Vietnam’s enhanced vocational training has helped boost the quality of its pool of workers to close to China’s level and its government has been keen to clear hurdles including bureaucracy for foreign companies to invest in the country,” said Roy Lee, a researcher at Taipei-based Chung-Hua Institution for Economic Research.(Updates with share details in second paragraph)To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Trump Tumult Has Gadget Giants Splitting Along U.S.-China Lines
(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 dwu278@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Apple Suppliers See Demand for New IPhones Stabilizing This Year
(Bloomberg) -- Apple Inc.’s suppliers are preparing to produce components for up to 75 million new iPhones in 2019’s second half, roughly the same number as a year earlier, according to people familiar with the matter.The volumes planned for the next iPhone launch cycle would signal steady demand for the company’s most important product, despite U.S.-China trade tensions and a decline in the overall smartphone market. The Cupertino, California-based technology giant stopped divulging iPhone shipment numbers in the holiday quarter last year as unit growth turned negative and started providing metrics to highlight the growth of services such as Apple Music. Analysts estimate Apple sold 70 million to 80 million new iPhones in the second half of last year.The company’s Asian suppliers are gearing up to produce components for three new iPhone models to meet holiday-season demand, the people said, asking not to be identified citing internal estimates. The U.S. company’s Asian partners could ramp production up to 80 million new phones if needed, one of the people said. Main iPhone assembler Foxconn Technology Group has stepped up hiring in Shenzhen and is offering staff about 10% more than a year ago to secure a peak-period workforce, another person familiar with the matter said.The iPhone assembler Pegatron Corp. added to gains and closed 2.3% higher, while lens maker Largan Precision Co. rose 2.6%. Taiwan Semiconductor Manufacturing Co. pared earlier losses and closed unchanged.Apple has announced new iPhones each September since 2012 and the new models typically go on sale in the final weeks of that month. The company reports third quarter earnings on July 30, and the firm’s guidance could indicate its expectations for iPhone sales at the end of the fourth quarter ending in September. Apple still provides iPhone revenue figures, with the company generating $52 billion from iPhones last holiday quarter, a 15% decline, and $37 billion from new iPhones in the last fourth quarter, a 27% increase. Those numbers, however, include a mix of both last year’s new models and earlier versions of the iPhone.Jeff Pu at GF Securities estimates that shipments of newly released iPhones will rise to 74 million in the second half, up about 7% from his estimate of 69 million last year, while TF International analyst Ming-Chi Kuo forecast that Apple would sell 75 million to 80 million new iPhones in the second half of 2018. This year’s volumes may signal stabilization after a year of uncertainty, though that’s a far cry from the double-digit growth numbers of years past.Of course, the fact that Apple suppliers plan to produce parts for 75 million new iPhones doesn’t necessarily mean the company will sell that many. Apple will assess sales after launch and the total shipments may not reach that mark. The company declined to comment.Apple is struggling with soft smartphone demand as people take longer to replace their gadgets and Chinese rivals like Huawei Technologies Co. grab market share. The trade war is also denting Chinese economic growth while souring consumers there on American brands. Analysts have been betting on a 13.3% drop in iPhone shipments to roughly 189 million in fiscal 2019, according to average projections compiled by Bloomberg.“Apple’s growth has become more cyclical and slowed along with the global smartphone market, leaving it dependent on iPhone upgrades to drive sales,” Bloomberg Intelligence analysts John Butler and Boyoung Kim said. “Apple’s inability to raise iPhone prices much higher is constraining growth. Weakness in China due to competition and the trade war with the U.S. remains an issue.”While Apple is relying on services to take up the slack, sales of the gadget remain its largest revenue driver and the U.S. company needs to get the latest devices into the hands of its users so they can actually download and subscribe to new services like the upcoming Apple Card, Apple Arcade gaming service, and Apple TV+, a Netflix rival.The major attraction in this year’s models lies in enhanced cameras: the two high-end models to replace the iPhone XS and iPhone XS Max will include three back cameras, up from two, and a successor to the iPhone XR will include a second back camera. The third camera will serve as an additional ultra-wide lens, Bloomberg News reported in January, allowing the phone to automatically repair parts of an image that may be initially chopped out of a frame. It will also enable a wider range of zoom. All three new models will also include faster A13 processors built by TSMC, Bloomberg News reported in May.Beyond the additional rear cameras, the new iPhone models will look similar to the 2018 versions, which looked like the 2017 iPhone X. Apple is planning a more extensive revamp of the iPhone with an updated design, 5G connectivity, and new augmented reality cameras for 2020, Bloomberg has also reported.Read more: Apple’s 2019 and 2020 iPhone and iPad PlansWall Street sentiment on Apple may be starting to brighten somewhat after a prolonged period of investor-pessimism. Morgan Stanley boosted its target price on the stock this week, days after another firm upgraded the shares. Apple may benefit from a U.S. ban on the sale of American technology to Huawei, not to mention Japanese exports curbs to Korea that threaten Samsung Electronics Co. Apple’s main chipmaking partner, TSMC, also helped allay fears of a protracted industry slump when it projected current-quarter revenue ahead of estimates. Longer term, investors hope Apple can rejuvenate its most iconic gadget.(Add share price changes in fourth paragraph.)To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Gao Yuan in Beijing at ygao199@bloomberg.net;Mark Gurman in San Francisco at mgurman1@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Apple Wants Suppliers to Mull Major Shift From China: Nikkei
(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 dwu278@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
ReutersPegatron eyes up to $1 billion Indonesia investment to assemble Apple phone chips: deputy minister
Taiwan's Pegatron has signed a letter of intent stating it intends to invest 10-15 trillion rupiah ($695 million to $1 billion) in an Indonesian factory to assemble "chips for Apple smartphones", Indonesia's deputy industry minister said on Tuesday. Pegatron plans to assemble the phone chips in partnership with Indonesian electronics company PT Sat Nusapersada at a factory on the island of Batam, Deputy Minister Warsito Ignatius told Reuters. Pegatron declined to comment.
- Reuters
BRIEF-Pegatron Posts Q1 Consolidated Revenue And Net Profit
May 7 (Reuters) - Pegatron Corp: * SAYS Q1 CONSOLIDATED REVENUE T$294.1 BILLION ($9.52 billion), NET PROFIT AT T$1.33 BILLION Source text on Eikon: Further company coverage: ($1 = 30.8980 Taiwan dollars) ...
- Reuters
BRIEF-Pegatron's 2018 Net Profit At T$11.1 Bln, Consolidated Revenue At T$1,340 Bln
March 14 (Reuters) - Pegatron Corp: * SAYS 2018 NET PROFIT AT T$11.1 BILLION ($359.14 million), CONSOLIDATED REVENUE AT T$1,340 BILLION Source text for Eikon: Further company coverage: ($1 = 30.9070 Taiwan ...
- Reuters
BRIEF-Pegatron Says Feb Sales Up 6.3 Percent Y/Y
March 11 (Reuters) - Pegatron Corp: * SAYS FEB SALES UP 6.3 PERCENT Y/Y Source text in Chinese: https://bit.ly/29I3zX1 Further company coverage: (Reporting by Hong Kong newsroom)
- Reuters
China Stocks-Factors to watch on Tuesday
* PREVIOUS TRADING SESSION MOVES: * SSEC +1.1 pct, CSI300 +1.2 pct, HSI +0.5 pct * Shanghai- HK daily quota used 6.7 pct * HK- Shenzhen Connect daily quota used 8.8 pct, Shenzhen- HK daily quota ...
- Reuters
BRIEF-Pegatron's Unit Protek (Shanghai) Buys 27.7 Mln Shares In Luxshare Precision
March 4 (Reuters) - Pegatron Corp: * SAYS UNIT PROTEK (SHANGHAI) LTD BOUGHT 27.7 MILLION SHARES IN LUXSHARE PRECISION INDUSTRY CO LTD FOR T$2.5 BILLION ($81.12 million) ON MAR 4 Source text for Eikon: ...
