Category Archives: iPhone

Seven Billion Dollar Deal Could Bring 50,000 Jobs to US

The top and side of an iPhone 5S, externally identical to the iPhone 5. Photo courtesy of Calerusnak

Two high tech giants, Foxconn and Apple, are considering a deal to build a panel factory in the United States at a cost of about $7 billion and could create between 30,000 and 50,000 jobs. Chairman Terry Gou of Foxconn said that an investment by Foxconn’s Sharp division will depend on the terms negotiated for the deal at the state and federal levels.

The announcement of the deal comes close on the heels of President Donald Trump’s inaugural address in which the new president promised to make “America First” as the backbone of his policies leading the nation. Trump stated in his speech: “We will follow two simple rules: buy American and hire American.”

One of Trump’s campaign promises was to try and persuade Apple to bring the manufacture of iPhones to US shores. Trump said that he was optimistic that Tim Cook, CEO of Apple, had his “eyes open” to the possibility. Foxconn is the biggest producer of iPhones.

Gou said that Trump-style protectionism was inevitable, but he is unsure how Americans will feel about spending hundreds of dollars more for a phone that does not work any better than a less expensive model that was made overseas.

Gou vowed to increase his investments in China. Apple is also dependent on China, not just for production, but also for sales. Last year China made up 22 percent of Apple’s total revenue, some $46.4 billion.

Apple Buy Back Plan Keeping Customers Loyal

Trade-in Your iPhone at an Apple Store Near You
Trade-in Your iPhone at an Apple Store Near You

Ready to upgrade your iPhone? Why not save yourself some time and trouble and let Apple buy it back from you? This month Apple is planning on launching an in-store buy-back program with the express goal of helping people to upgrade to iPhone 5, and maybe even buy some cool accessories they might not have thought of buying before.

How does this program benefit Apple? Let us count the ways:

•    An almost bottomless source of not-too-used phones which can help fill a growing overseas market. As Western markets become loaded with iPhones the Asian and other markets become a more important source of revenue for Apple.

•    There is already a recycling option for Apple customers through their web site, but offering customers a trade-in option for immediate credit towards a new phone gets them into the stores, where the goodies therein are almost irresistible. This makes already quite loyal Apple customers even more loyal.

•    Apple also believes the program will benefit their customers in terms of convenience if not financial. It is simpler to just march into an Apple outlet and get a good price than to go through the trouble of selling in one of the thriving second hand markets for electronic devices, such as BuyMyTronics, Gazelle and Glyde, although there is small chance Apple will outbid the open market.

This clever program should get Apple a lot of gently used phones to sell in the East, while at the same time keeping their customers close at heel with a trade-in program that only offers credit in their stores. Apple certainly has no intention of giving today’s Apple owners a chance to become tomorrow’s Galaxy groupies.

New iPhone Coming this Summer

New iPhone Coming this Summer
New iPhone Coming this Summer

In order to win back some market share from the less expensive smartphones running Android software, Apple will be introducing yet another iPhone this coming summer.

The launching season for iPhone, at least the last two models, has been in the fall, but consumers can expect a newer and less expensive iPhone appearing relatively soon.

According to the Wall Street Journal the target market for this new Apple product is developing countries where the high price of iPhone has directed people to the less expensive Android-running smartphones.

It is Apple’s company policy not to discuss future products before their launch events. Apple execs emphasize consistently that it is Apple’s goal to make the best products and not necessarily the cheapest.

The WSJ added that Apple is ready to begin production of their latest addition to the iPhone line within the next three months.

Citi Cuts Apple’s Rating in Light of Low Expectations for iPhone 5

Sales of iPhone 5 Not Gangbusters

Financial services company Citi has downgraded Apple’s rating from ‘buy’ to ‘neutral’ and lowered their price target to $575 due to their expectation that iPhone 5 sales will not be strong enough to prop up the stock.

Citi’s Apple analysts, Glen Yeung, Walter Pritchard and Jim Suva originally rated Apple ‘buy’ when they thought iPhone 5 sales would be impressive. UBS and Jefferies financial analysts also cut their price targets for Apple last week, but maintained the rating of ‘buy’ for the popular technology company.

Reports from Asian supply chains say that Apple has reduced their orders for the iPhone for 2013’s first quarter. It is logical that supply should be reduced after the holiday season somewhat, but Apple is cutting their production more than expected.

According to Citi, “Our checks suggest Apple has seen a 45-50% increase in monthly iPhone 5 production output October to December.” Since this improvement exceeded expectations it is not surprising that Apple is cutting orders for the beginning of the year.

It comes down to analysts at Citi believing that if iPhone 5 demand was high then Apple would continue to manufacture them at full-speed ahead. Since that is not the case and Apple is cutting production this signals to Citi that demand is only ‘good,’ and not ‘great,’ which is what Apple would need to get a ranking of ‘buy’ from Citi.

iPhone 5 Hits Stores Around the World Triggering Long Lines and Happy Customers

Tim Cook, New CEO of Apple
On Line in New York for iPhone 5

The much anticipated iPhone 5 made its appearance on Friday, exciting buyers and sellers as it was whisked off the shelves by the thousands.

The new Apple offering is not an astounding technological breakthrough, but just a bit better in many of the ways the customers already love their old iPhones: like a super-model, its thinner, taller and lighter, and that’s about it.

This is the first product launch since Tim Cook took over Steve Jobs’ position as head wizard at Apple, and it seems his skills might not quite be a clone of Jobs’ special magic, but Cook seems to have a bit of magic of his own up his sleeve.

“We are positively surprised regarding the pace of the rollout, since we had expected a bigger impact from component constraints,” Barclays analyst Ben Reitzes said.

And what at pace it’s been, and is going to be. On Friday the iPhone 5 went on sale simultaneously in New York, Japan and Hong Kong, and a few other hot spots. By next Friday expect to see this hot-selling phone in 31 countries, and by December 31st of this year, in more than 100. That exceeds by 30 the number of countries the iPhone 4s , the 5’s predecessor, was launched from during a similar time-frame.

“His skills fit the time period and the flow of product,” said Raymond Miles, professor emeritus at Haas School of Business at the University of California, Berkeley. He added that Apple may be at a stage where it needs “someone with a production vision.”

Cook’s magic seems to be working: He was able to supersede Jobs’ sales record as preorders for the 5s climbed to 2 million within 24 hours, twice the speed with which the 4s was pre-sold. Analysts and observers/investors are anticipating a similar successful launch of the smaller iPad mini in October.