Cocky Foxconn tells tech biz: We'll design your mobes, you do the ads
Factory barons upbeat after smashing profit prediction
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The phone-making division of Foxconn swung into the black with a net profit of $75.1m (£47.5m) in 2011, according to its latest preliminary report to the Hong Kong Stock Exchange [PDF].
It also offered to take care of all the tough stuff in product design, leaving the marketing and branding to its tech titan clients.
The result is double the manufacturer's predicted profits for the financial year ending 31 December - Thomson Reuters analysts had forecast a profit of just $27m - and a contrast to the $219m (£138) loss that the mobe maker sustained in 2010.
Foxconn International churns out phones for Nokia, Sony and Motorola and is a subsidiary of Hon Hai Industries which also runs Foxconn Technology - the light-metals manufacturer that produces the iPhone and iPad among other gear.
The 2011 turnover for Foxconn International was $6.35bn, down 4.1 per cent from 2010's $6.63bn, but the company managed to grow its margins, an improvement that management attributed to attracting more high-end contracts for 3G smartphones rather than simpler and cheaper handsets. The management touted Foxconn's "one-stop-shop solutions" in design, manufacturing and logistics as being particularly attractive to clients.
Foxconn boasted that it leaves only the marketing to the brands that hire them: "Our customers can now focus on product positioning, marketing, sales and distribution while leaving us to take care of their product design and supply chain" said the report.
Bosses also listed ways they had cut costs in 2011, chiefly by "right-sizing capacity", getting rid of equipment that wasn't being used and cutting back on R&D in some areas.
Foxconn International also axed 27,819 jobs, reducing its workforce to 98,868 employees from 126,687 in 2010 and cutting the staffing bill by $22m to $533m. More job cuts may come as manufacturing automation was tipped as pivotal to long-term success in the management's outlook predictions.
Earnings per share were 1.01 US cents, up from a loss 3.06 cents a share in 2010. ®
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COMMENTS
Makes sense for companies
Engineers only cause tensions in companies, because they have their own views on how things should be run. They claim they have an insight into the market because they claim they understand the technology and they claim technology matters.
Actually Apple is one of the first large companies to publicly get rid of huge parts of their engineering departments. They used to advertise their hardware design. They used to advertise the fact they had a different hardware architecture than PCs. Now it's all (nearly) the same. They have no special hardware any more. Engineering is way less important for Apple than it used to be.
They are just catering to the new company management credo...
"Sales are the only income-generating branch, the rest is only unneeded overhead"
And they still wonder why they're failing. Sigh.
Just like HTC
HTS used to just make the mobes, then design them. The big brands with all their well paid marketting managers just slapped their sticker on.
And then HTC decided they could do that too.
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