Original URL: http://www.theregister.co.uk/2011/08/30/foxconn_losses_reduced_but_future_uncertain/

Foxconn reports $17.6m 1st-half loss as robot legion grows

Company that actually makes everything struggles

By Brid-Aine Parnell

Posted in Business, 30th August 2011 10:56 GMT

Foxconn International, which makes components for Apple, Motorola Mobility and Nokia products, has seen considerably reduced first-half losses this year, though its outlook is still uncertain.

The unit of Taiwanese electronic components conglomerate Foxconn Technology Group reported an unaudited loss of $17.6m, compared to a loss of $143m in the same period of 2010.

"The global handset eco-system remained extremely volatile and challenging during the first half of 2011," the company said. "We continued to see market share shifts among global OEM brands and other market players."

Profit at Foxconn is being impacted by changes in the mobile world, particularly at Motorola and Nokia, two of its biggest clients. Nokia continues to see its market share eroded as it struggles to find its feet in a rapidly-changing smartphone landscape and Google is set to buy Motorola Mobility for $12.5bn, leaving the future of the handset business uncertain.

The company has also had its own problems, with a number of worker suicides throwing a less-than-flattering spotlight on wages and treatment of its workforce and an explosion at a new factory in Chengdu in May, which killed three employees.

As well as pay rises, improved facilities and counselling for workers, Foxconn seems to think that more automation is the answer to the unhappiness of its employees. In July it announced a plan to replace some of them with a million robots over the next three years. Terry Gou, founder and chairman of the company, said at the time that the plan would help cut rising labour expenses and improve efficiency.

In the meantime, "development of new customers and excelling in the smartphone market remain top priority", according to Foxconn International's results announcement. ®