Talk of a pricier iPhone 15 Pro, Foxconn says manufacturing moves are just business, and teasing a mixed reality.
In Manufacturing Moves, Foxconn Follows the Money
Think Foxconnâs manufacturing moves out of China are politically motived? COVID-related? Some sort of moral stance? Foxconn chairman Young Liu says itâs just business.
The contract manufacturer and Apple production partner held an earnings call Wednesday. While roughly â70% of Foxconnâs revenue comes from China,â that will change. The Wall Street Journal (via Apple News) had Foxconnâs chairman saying on the call, âIt is a basic truth that labor-intensive industries transfer to low [gross domestic product] countriesâŠâ The piece went on to say:
These economies grow with the development of the labor-intensive industries, which in turn triggers another round of transfers, he said, referring to the past migration of such production from the U.S. to Japan, then to Taiwan, then to mainland China.
âThese high GDP countries must upgrade their industries in order to support the sustainable development of a high GDP society,â [Liu] said.
Hence Foxconnâs expansion in Mexico, Vietnam, and anticipated expansion in India (and India).
Near Term Negativity on Consumer Side
As for the earnings part of the earnings call, not great and not great going forward. At least not on the consumer side. A piece from AppleInsider had Foxconn reporting a 10% decline last quarter versus the same quarter a year earlier.
On the call, Young Liu said he and his âmaintain a relatively conservative view towards the smart consumer electronics, and think they might decline slightly.â Such pessimism is due to inflation and a slowing global economy, according to the piece. That said, the chairman indicated that Foxconn expects âoverall computing demand to rise,â specifically for âits cloud, networking, and component products.â
Haitong Analyst Expects Prices for iPhone 15 Pro to Increase
Everythingâs getting more expensive â maybe even one of the most expensive phones you can buy. A headline from MacRumors says, âiPhone 15 Pro Predicted to See First Price Increase Since iPhone X.â
Well â in the U.S. and China, anyway. âOutside of the U.S.,â The piece points out:
âŠApple has increased the prices of iPhones multiple times in recent years, largely due to foreign currency fluctuations. In the U.K., for example, the iPhone 14 Pro starts at ÂŁ1,099, compared to ÂŁ949 for the iPhone 13 Pro.
This would not be that, though. This prediction is based on a note from Haitong International Securities analyst Jeff Pu. He thinks the next Pro phoneâs anticipated innards, âincluding a titanium frame, solid-state buttons with haptic feedback from extra Taptic Engines, an A17 Bionic chip, increased RAM, a periscope lens for increased optical zoom on the Pro Max model, and moreâ will drive the prices higher.
The piece says this is the second time higher prices have been predicted for the next round of Pro iPhones. That said, it feels like this is a worry/belief expressed every year â right up until Apple says, âstill starting at $999,â or words to that effect.
Iâm not saying itâs not gonna happen. Everythingâs getting more expensive. Still â it feels like weâve heard this one before. Maybe donât assume the prices are going up, but donât be surprised if they do.
Efficiency, Low Headcount Keep Apple Layoffs at Bay
Another âhow has Apple avoided layoffsâ story today. We heard yesterday of a reported cooling in terms of hiring for the Cupertino-company. Secret peeps tell Bloomberg that the company is implementing a few cost control measures. They include a close eye on budgets, limiting travel, a change in the bonus pay schedule, and â in many cases â not filling positions left vacant.
None of that sounds fun, though it does sound better than the tens-of-thousands of jobs lost across the tech sector over the past several months. And so, the question posed this time by Barronâs (via Apple News) â how has Apple avoided layoffs? There are two answers in the piece: efficiency and not having too many people to begin with, which ties back to the efficiency.
On the people part, Barronâs cites a note from Evercore. According to that, âApple never hired aggressively through the pandemic and doesnât need to go through extensive head count reductions unlike peers.â Itâs kind of funny though. Itâs unclear from the Evercore bit who Appleâs peers would be. While the Barronâs piece juxtaposes the lack of layoffs at Apple with layoffs at Facebook parent Meta, Evercore says analysts there âcontinue to think consumer staples and/or high-end luxury companies remain the relevant peer group for Apple.â
So, is anybody reporting on the number of layoffs from Tiffany?
As for Appleâs efficiency â a figure that is kind of grotesque. Quoting Barronâs:
Apple generated around $2.4 million in revenue per employee in its latest fiscal year and has averaged around $2.1 million on the same metric over the past five years, according to FactSet.Â
As for the hard times Facebook has faced, Meta âgenerated $1.35 million in revenue per employee in 2022âbelow its five-year average of $1.5 million.â
If this was video Iâd do a spit take. Making only $1.35 million in revenue per employee means having to fire tens-of-thousands of people?
I weep for the present.
Apple Makes More Developer Betas Available
Appleâs syncopated beta releases continue. I told you yesterday that Apple had released the fourth developer beta of tvOS 16.4 â all on its little lonesome. Now, here comes everybody else. MacRumors hit with a few posts Wednesday. One announced the fourth developer betas of iOS and iPadOS 16.4. Another heralded the arrival of the fourth developer beta of macOS Ventura 13.3. And â not to be left out â yet another hipped developers to the availability of the fourth beta of watchOS 9.4.
Maybe itâs not syncopated. Maybe the tvOS beta simply jumped the gun.
One more out there to tell you about â perhaps the most unusual of the bunch. A piece from AppleInsider says âApple has released the fourth Studio Display firmware beta for version 16.4.â According to the report:
Users with the beta installed on a Mac connected to the Studio Display will get prompted to install the monitor’s fourth beta for version 16.4.
Latest Apple Source Code on GitHub References realityOS
And finally today, the Apple headset OS snipe hunt continues. Flip a coin from day-to-day and the operating system for Appleâs anticipated mixed reality device is either called ârealityOSâ or âxrOS.â Flipping the coin Wednesday, it came up âreality.â
9to5Mac has word of two signs of Appleâs MR adventure. âAs shared by Aaron on Twitter,â the site says Apple on Wednesday:
âŠupdated its source code available for developers on GitHub. (âŠ), the latest open source code from the company mentions ârealityOSâ and âReality Simulatorâ along with currently existing platforms such as iOS, macOS, and watchOS.
What happened to âxrOS?â Good question. Relatively recent reports from Bloomberg had indicated that âxâ marked the sport to which Apple was moving. 9to5 says that name âwould be a reference to âextended reality,ââ which the piece says âmakes sense when considering the whole idea of integration between AR and VR.â At the same time, Apple has registered a number of seemingly related trademarks, including âReality One,â âReality Pro,â and âReality Processor,â which makes realityOS seem more real.
Curious which way the coin will land tomorrow.
Today on The Mac Observerâs Daily Observations Podcast
TMO Managing Editor Jeff Butts and I can not help falling into the realityOS trap â because one of us is a junkie. I wonât say which. Plus â Jeffâs spotted news of a smart car heâs excited to talk about because itâs not depressing. Thatâs all today on the Daily Observations Podcast from The Mac Observer.