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Foxconn in talks to remain Apple's sole 'iPad 3' manufacturer in 2011 - rumor

post #1 of 35
Thread Starter 
Apple's manufacturing partner Foxconn is said to be working to persuade the company into signing a new deal that would make it the sole builder of a new iPad model, rumored to launch later this year.

Because of Foxconn's efforts, Pegatron Technology is now considered "unlikely" to share orders for Apple's next iPad, according to DigiTimes. Citing industry sources, the report said that Pegatron was the most likely contender to become Apple's second iPad manufacturing partner.

"However, Foxconn exerted its efforts to protect its orders and apparently has persuaded Apple to not shift some of its iPad orders to other contractors for the moment," the report said.

It was the same publication that reported on Monday that Apple was looking to add a second manufacturer for production of a new iPad model this fall. That report, along with Wednesday's latest update, referred to such a device as a so-called "iPad 3," but a separate source last week suggested Apple is more likely to release an "iPad 2 Plus" model that would expand the product lineup rather than replace the current iPad 2.

Wednesday's latest report said that Pegatron is still expected to receive orders for 10 million units of Apple's fifth-generation iPhone, expected to launch in the coming months. And the company is said to be eyeing potential orders for an anticipated fourth-generation iPad expected to debut in 2012.



As for this year's supposed new iPad model, one report last week characterized such a device as an "iPad HD, with a double screen resolution of 2048-by-1536 pixels. It said that the new model would be marketed as a "pro" device aimed at a higher end market.

While rumors of a new iPad model launching this year continue to persist, skepticism about those claims remains, as such a device has been seen by some as a possible fragmentation of Apple's iOS device family. A so-called "pro" iPad model arriving only a few months after the iPad 2 would shake up Apple's traditional decision to release one major iOS device upgrade per year.
post #2 of 35
It would be a genius move to release an even better iPad on the heels of iPad 2 success. It would solidify the Market as much as the iPods if not more..
post #3 of 35
My initial thoughts after reading this were: Why Foxcon/HonHai? They can't scale, can't innovate and can't keep a secret.

But, then I started thinking about how much Foxcon has paved the sales floor way for APPL in China. This is the market, not ROW, we are faster at starting a trend, but China is the volume that every manufacturer wants to sell enmass.

Why do I care as long as new tech-toys continue to fall from the APPL tree?

-RJ
post #4 of 35
These iPad 3 rumours are most confusing.
post #5 of 35
Quote:
Originally Posted by myapplelove View Post

It would be a genius move to release an even better iPad on the heels of iPad 2 success.

It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

That's not the heels of success. That's the heels of " 'once upon a time, the greatest warrior on Earth stood here, and so we've erected a giant statue in his honor' and you're some little kid looking up at the statue".

No iPad 3 until next year. No new model until Apple can make enough of the current one to even satisfy its DEMAND.

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post #6 of 35
Quote:
Originally Posted by Tallest Skil View Post

It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

That's not the heels of success. That's the heels of " 'once upon a time, the greatest warrior on Earth stood here, and so we've erected a giant statue in his honor' and you're some little kid looking up at the statue".

No iPad 3 until next year. No new model until Apple can make enough of the current one to even satisfy its DEMAND.

you are vehemently arguing something you are so wrong about.
post #7 of 35
Quote:
Originally Posted by myapplelove View Post

you are vehemently arguing something you are so wrong about.

My points are completely correct. Whether Apple agrees with sanity is left to be seen, of course. On that you are right.

You can't (or refuse to) imagine the backlash at a new iPad this year. Trust in Apple would be shattered. It'd be like the discontinuation of the 4GB iPhone... times six. At least.

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post #8 of 35
Quote:
Originally Posted by AppleInsider View Post

... As for this year's supposed new iPad model, one report last week characterized such a device as an "iPad HD, with a double screen resolution of 2048-by-1536 pixels. It said that the new model would be marketed as a "pro" device aimed at a higher end market.

While rumors of a new iPad model launching this year continue to persist, skepticism about those claims remains, as such a device has been seen by some as a possible fragmentation of Apple's iOS device family. A so-called "pro" iPad model arriving only a few months after the iPad 2 would shake up Apple's traditional decision to release one major iOS device upgrade per year.

iPad HD as an addition to the iPad line seems likely because its display is probably to expensive to be able to sell for the same price as the current iPad2.
Fragmentation is hardly an issue because resolution doubling is already something developers have to deal with on the iPhone. It would be a bigger problem if pixels got a different proportion.

J.
post #9 of 35
Quote:
Originally Posted by Tallest Skil View Post

My points are completely correct. Whether Apple agrees with sanity is left to be seen, of course. On that you are right.

You can't (or refuse to) imagine the backlash at a new iPad this year. Trust in Apple would be shattered. It'd be like the discontinuation of the 4GB iPhone... times six. At least.

blah, blah blah...
post #10 of 35
Quote:
Originally Posted by Tallest Skil View Post

You can't (or refuse to) imagine the backlash at a new iPad this year. Trust in Apple would be shattered. It'd be like the discontinuation of the 4GB iPhone... times six. At least.

Yeh when the iPod colour was released 3 months after the iPod 4G my trust was shattered, so much so that I gave my practically new iPod 4G to my brother and bought a colour. Consumer electronics get better, and people expect it - Apple is unusual in only releasing a model a year, if they release two they'll still be releasing fewer than everybody else.

I do find it interesting that you're starting to move back from 'it won't happen' to 'it shouldn't happen'. I guess even you can tell the way that the wind is blowing.

Quote:
It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

Found one!

http://store.apple.com/us/browse/hom...co=MjE0OTI0MDI
post #11 of 35
If Apple and Foxconn are only just now negotiating on the iPad 3, how is it going to be released this year, especially if it would have to launch before the holiday shopping season? I don't see how you go from negotiation to production that quickly. It's not just a matter of slapping a different display on the current iPad - Apple always makes little tweaks here and there for even "minor" hardware revisions.
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27" 3.06 GHz iMac

16 GB iPhone 4
80 GB iPod Classic
1 GB 2nd Gen iPod Shuffle

Apple TV (2nd gen)
Apple TV (1st gen 40 GB)
AirPort Extreme Base Station (802.11n)
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post #12 of 35
Quote:
Originally Posted by myapplelove View Post

blah, blah blah...

I wonder if you truly think that this makes me inclined to EVER take any of your posts seriously.

Quote:
Originally Posted by cloudgazer View Post

I do find it interesting that you're starting to move back from 'it won't happen' to 'it shouldn't happen'. I guess even you can tell the way that the wind is blowing.

No, I just know crap when I see it.

How's that iPhone nano treating you? Your model should be, what, three years old at this point?


In stores, for heaven's sake.

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post #13 of 35
Quote:
Originally Posted by myapplelove View Post

blah, blah blah...

Hey, word on your sig, I'm assuming you mean a non matte product such as http://www.tru-vue.com/Tru-Vue/Produ...ti-reflective/.

The reason that museum glass would be a potentially bad move is that it's not designed for scratch resistance - it's designed purely for optical properties. The anti-reflective coating looks REALLY bad when it gets scratched, and it's invariably softer than the base glass.
post #14 of 35
Quote:
Originally Posted by Tallest Skil View Post

In stores, for heaven's sake.

Yes but the problem in stores is nothing to do with supply difficulty, it's just an issue with holding stock for such a large number of similar devices. There were identical problems with the iPod, you would often have to order online if you really wanted a particular colour combined with a particular size.

Quote:
How's that iPhone nano treating you? Your model should be, what, three years old at this point?

What on earth are you raving on about?
post #15 of 35
Quote:
Originally Posted by tetzel1517 View Post

If Apple and Foxconn are only just now negotiating on the iPad 3, how is it going to be released this year, especially if it would have to launch before the holiday shopping season?

Who says they're only just now negotiating? All this article says is that Foxconn is trying to pursuade Apple to use them exclusively - there's nothing to say that they hadn't already gotten agreements in place for Foxconn to be an assembler of whichever model is under discussion.
post #16 of 35
Quote:
Originally Posted by cloudgazer View Post

Hey, word on your sig, I'm assuming you mean a non matte product such as http://www.tru-vue.com/Tru-Vue/Produ...ti-reflective/.

The reason that museum glass would be a potentially bad move is that it's not designed for scratch resistance - it's designed purely for optical properties. The anti-reflective coating looks REALLY bad when it gets scratched, and it's invariably softer than the base glass.

true but I am just making a point, more than promoting a certain type of glass panel.
post #17 of 35
Quote:
Originally Posted by myapplelove View Post

true but I am just making a point, more than promoting a certain type of glass panel.

Sure, but the same problem exists with all non-matte anti-reflection solutions. Oh and there's a slight colour imbalance too, because the anti-reflection effect is tuned, so it will dampen reflection of different wavelengths to different degrees - that's less of an issue though.
post #18 of 35
Quote:
Originally Posted by myapplelove View Post

It would be a genius move to release an even better iPad on the heels of iPad 2 success. It would solidify the Market as much as the iPods if not more..

There are no doubts they won't release "an even better ipad" just doubts about what that means and when it will happen.

Frankly I don't think there will be an ipad 2+/3 this year.

I think that the rumors of a second manufacturer are somewhat bogus just like I think that these rumors that Foxconn is trying to talk Apple out of it are bogus. The just reeks of tabloid CYA from claiming two folks are dating but they aren't and so now the tab has to say that they broke up etc.

I don't think anyone can talk Apple into anything. If they want to add another source they will, so long as the contract allows and you can bet they made sure it does. It might force them to wait to add that company until 2012 so for perhaps a month Foxconn might be the only ones building ipads for the upcoming spring 2012 launch but what Apple wants they tend to get. And if you think demand was nuts for the ipad 2. Wait til the ipad 3 with the new cameras, the less glossy display and better oleophobic coating, better battery, etc.

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post #19 of 35
...to continue to use Foxcomm/HonHai for now, in that they are part of the China ecosystem and are seen as viable and important contributors to the China economy. In fact this may give Apple some special privileges in China (unlikely but not out of the question despite the number of other companies also using FC/HH). This is purely unsubstantiated speculation - I haven't had a chance to dig into China's treatment of companies supporting their economy, but it is not unusual to so do. I could see Apple expanding use of manufactories in other regions (much like FC/HH is building in South America) to help build direct supply for each region - if demand makes that practical.
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post #20 of 35
Quote:
Originally Posted by fecklesstechguy View Post

I could see Apple expanding use of manufactories in other regions (much like FC/HH is building in South America) to help build direct supply for each region - if demand makes that practical.

The Brazilian plant is motivated by tariff considerations, rather than anything else. Adding Pegatron as a supplier is about scaling the bulk production faster and diversifying their supply chain a little to reduce risk.

Pegatron and Foxconn are both Taiwanese firms that do the bulk of their assembly in China - so it's not as if using both of them would unduly upset the Chinese.

I agree with you though that Apple seem to have an unusually good relationship with China, and it's not clear why.
post #21 of 35
This time around in 2010 there were also rumors of iPad 2 released in 2010, and it was wrong.

One thing I know for sure is that Apple do things in advance, but then the analyst always think they need to release different version to stay competitive, even though they are beating everybody in all the categories that matter.

Most of these analysts are too dumb to learn from the past.
post #22 of 35
Quote:
Originally Posted by Tallest Skil View Post

It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

That's not the heels of success. That's the heels of " 'once upon a time, the greatest warrior on Earth stood here, and so we've erected a giant statue in his honor' and you're some little kid looking up at the statue".

No iPad 3 until next year. No new model until Apple can make enough of the current one to even satisfy its DEMAND.

So as long as you can barely satisfy demand for your own product, you should ignore what your competitors are doing and stop innovating? Yes, this makes total sense!
post #23 of 35
Regarding the retina display for the iPad... I don't think Apple will release it as a "Pro" model. A "pro" market won't use the iPad until it has a more open file system -- the constricted file system makes it difficult to produces certain types of media without jumping through hoops. Plus if the retina display is released in a "pro" model which would likely cost a lot of money, people would at that point would just buy a laptop -- the "pro" model won't get a lot of support.

I think Apple would be smart to wait until production costs of the retina display comes down in price enough to include in ALL iPad models. That way developers will include iPad retina display support in all their apps since so many people would have them. (as opposed to a small fragment minority of iPad "pro" owners).
post #24 of 35
Quote:
Originally Posted by myapplelove View Post

It would be a genius move to release an even better iPad on the heels of iPad 2 success. It would solidify the Market as much as the iPods if not more..

Your analogy is flawed. See below to learn.

Quote:
Originally Posted by nvidia2008 View Post

These iPad 3 rumours are most confusing.

Indeed. Confusing and often erroneous.

Quote:
Originally Posted by Tallest Skil View Post

It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

That's not the heels of success. That's the heels of " 'once upon a time, the greatest warrior on Earth stood here, and so we've erected a giant statue in his honor' and you're some little kid looking up at the statue".

No iPad 3 until next year. No new model until Apple can make enough of the current one to even satisfy its DEMAND.

Genius or idiotic?

Let's assume there's a grain of truth in the rumors (after all, the almighty (gag) Gruber hinted early this year that there would be another iPad released in the fall), it will not be an iPad3 in the traditional sense. Apple has NEVER released a new version so quickly. It is unnecessary to do this because the competition remains flummoxed. Furthermore, iPad margins are not as great as some people make them out to be (see their quarterly reports); however, they will increase with time and shipment volume. So, the more time they allow between versions, the more time they have to decrease costs, increase margins, amortize the fixed costs of tooling, etc. This is the standard business model even for this industry.

Back to the rumors and iPod analogy - Apple's iPod strategy was (is) to market an array of products spanning wide ranges of use, size and cost. If you are a serious music lover with a voluminous collection, there is the iPod Classic. If you have a medium size collection and want music on the go and some pics and videos to admire, there is the Nano (which also has the cute appeal for the teen market). If you are a runner, there is the Shuffle.

If the iPad playbook is indeed similar to that of the iPod (they are very different products), then if an iPad release is imminent, it will NOT be an iPad 2 replacement. Nor will it be an iPad 3 that is simply superior in some specs to iPad 2. It will be a different in form factor (Jobs has never been afraid to eat his words and produce a product he has publicly mocked) or some other way. What will it be? I don't know. After all, how many people saw the Shuffle and Nano coming before Jobs pulled them out of his crotch? But I personally do not believe a higher res screen alone is enough of a distinguishing factor. Such a product will create confusion, since there are already something like 12 different versions of the iPad2. Instead, any new iPad released in the fall will be different enough that some of us will buy it to go along with our iPad2.
post #25 of 35
Quote:
Originally Posted by Tallest Skil View Post

You can't (or refuse to) imagine the backlash at a new iPad this year. Trust in Apple would be shattered. It'd be like the discontinuation of the 4GB iPhone... times six. At least.

I'm not so sure about this prediction. If Apple does introduce an iPad2+ (or HD or whatever) it will NOT be replacing the iPad2. The 2 will still be selling like hotcakes so the people who bought one won't feel like they bought a just released/already out of date product. Besides the iPad2+ will have a higher price as well.

I don't think there would be much backlash at all, actually. Only the bleeding edge/ techie types will really care, and they don't call it bleeding edge for nothing--we know the game! I don't know if Apple could pull off a 2+ this fall, but if they can and it has the power to push all those pixels, I think it would be a great move!
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post #26 of 35
Quote:
Originally Posted by stelligent View Post

If the iPad playbook is indeed similar to that of the iPod (they are very different products), then if an iPad release is imminent, it will NOT be an iPad 2 replacement. Nor will it be an iPad 3 that is simply superior in some specs to iPad 2. It will be a different in form factor (Jobs has never been afraid to eat his words and produce a product he has publicly mocked) or some other way.

I have to disagree with you on this point because you're forgetting that Apple absolutely did this with iPods, in fact they did it often. Let's consider Just the iPod classic. In addition to the main generations, which were roughly yearly, there were more frequent bumps in the storage, and one at least one notable occasion screen.

I agree with you that Apple may also choose to diversify the product line into other form-factors, but that's a different consideration and doesn't bear on whether they'll adopt a more frequent spec-refresh schedule for the iPad.

The question is, does Apple intend to market the iPad in a similar way to the iPhone or in a similar way to the iPod? We already have one really big clue - the pricing. The iPhone is much more expensive than even the top end Android phones, but the iPad is the same price as all but the cheapest Android tablets. In pricing at least, iPad is looking much more like iPod than iPhone.
post #27 of 35
Quote:
Originally Posted by Rothgarr View Post

I think Apple would be smart to wait until production costs of the retina display comes down in price enough to include in ALL iPad models. That way developers will include iPad retina display support in all their apps since so many people would have them. (as opposed to a small fragment minority of iPad "pro" owners).

Yes, but...
Nobody else is making or using retina displays of this size. What is driving their prices down in your model?
The best way to bring 10 inch retina display prices down is to start producing an iPad2+ that uses them. It doesn't have to compete with the iPad2 in sales. There are always some people out there who must have the best of everything and are willing to pay for it. If they are happy to pay for the innovation, why shouldn't Apple let them? Once they are in mass production, prices will start to drop as we all know they will.
Then, in 6 to 18 months, retina displays will find their way into all iPads if all goes well!
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post #28 of 35
Quote:
Originally Posted by cloudgazer View Post

I have to disagree with you on this point because you're forgetting that Apple absolutely did this with iPods, in fact they did it often. Let's consider Just the iPod classic. In addition to the main generations, which were roughly yearly, there were more frequent bumps in the storage, and one at least one notable occasion screen.

On this point, don't think you're disagreeing with me; not at all.

Quote:
Originally Posted by cloudgazer View Post

I agree with you that Apple may also choose to diversify the product line into other form-factors, but that's a different consideration and doesn't bear on whether they'll adopt a more frequent spec-refresh schedule for the iPad.

The question is, does Apple intend to market the iPad in a similar way to the iPhone or in a similar way to the iPod? We already have one really big clue - the pricing. The iPhone is much more expensive than even the top end Android phones, but the iPad is the same price as all but the cheapest Android tablets. In pricing at least, iPad is looking much more like iPod than iPhone.

That leaves the possibility that they would introduce a high end iPad3. Would a high res screen alone justify that? Not sure. Not at all sure.
post #29 of 35
Quote:
Originally Posted by Tallest Skil View Post

It would be an IDIOTIC move to release another iPad in the year of iPad 2... AND when you can't even FIND an iPad 2.

That's not the heels of success. That's the heels of " 'once upon a time, the greatest warrior on Earth stood here, and so we've erected a giant statue in his honor' and you're some little kid looking up at the statue".

No iPad 3 until next year. No new model until Apple can make enough of the current one to even satisfy its DEMAND.

Uh...what? A giant statue erection? Honor? Warrior? Heels? A little kid?
How does that relate to the iPad IIGS?

Needless to say, the metaphor went over my head and landed with a thud.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

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post #30 of 35
Quote:
Originally Posted by Newtonrj View Post

My initial thoughts after reading this were: Why Foxcon/HonHai? They can't scale, can't innovate and can't keep a secret.

But, then I started thinking about how much Foxcon has paved the sales floor way for APPL in China. This is the market, not ROW, we are faster at starting a trend, but China is the volume that every manufacturer wants to sell enmass.

Why do I care as long as new tech-toys continue to fall from the APPL tree?

-RJ

What does the stock symbol for Appell Petroleum have anything to do with this discussion?
post #31 of 35
Shouldn't a bigger consideration be what happens if Foxxcon stops shipping for some reason? Either political unrest, an earthquake in that region, or a host of other reasons would shut off Apple's supply chain. Worse still, they depend on Taiwanese firms that hate them for parts.
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post #32 of 35
Quote:
Originally Posted by cloudgazer View Post

I agree with you though that Apple seem to have an unusually good relationship with China, and it's not clear why.

This is the genius of Apple that is often overlooked. A few years ago during my Apple Reseller days I met and attended a talk by an edu and enterprise speaker from Apple China's HQ in Beijing... A Canadian guy. Back then they were targeting high-end and international schools in China to go one-to-one with MacBooks for students. They already had quite a few schools on board... Apple they knew very much of the upcoming upper middle class and nouveau super-rich.

Only years later would we hear from Tim Cook laying down the game plan... "For emerging markets we're going to target China first and then take everything we learn from there to other countries." And indeed that's how it's been run in Asia. Apple China in charge of greater China and in charge of Apple South Asia which looks after India and South East Asia. Apple Korea probably is under Apple China too.

Japan is separate and was Apple's first foray into Asia. But they've admitted years ago they haven't seen the success they'd like. This was before iPhone, of course. In any case Japan is no longer the jewel in the eye of Western countries, at least in terms of potential Asian customer growth.

My guess is that sometime in the past decade Steve or others had the vision that Japan is old hat and slowly but surely put in a lot of resources into China... Firstly manufacturing of course, as most others jumped on the bandwagon. But they also put in a lot of research into "understanding" Asia by being in China and studying the Chinese. It's a vision that has payed off handsomely, so much so that they are being extra cautious in how they further enter the market. But Apple is no fool, while it dances in the ballroom with the Chinese awaiting a bigger Apple retail presence it's out in the streets samba-ing with the rest of Asia (yes culturally mismatched metaphor but you get my drift), seeing unprecedented growth.

Quote:
Originally Posted by Suddenly Newton View Post

Uh...what? A giant statue erection? Honor? Warrior? Heels? A little kid?
How does that relate to the iPad IIGS?

Needless to say, the metaphor went over my head and landed with a thud.

Something about a statue with a giant erection.
post #33 of 35
Quote:
Originally Posted by brent View Post

Shouldn't a bigger consideration be what happens if Foxxcon stops shipping for some reason? Either political unrest, an earthquake in that region, or a host of other reasons would shut off Apple's supply chain. Worse still, they depend on Taiwanese firms that hate them for parts.

While Taiwan is on the Pacific "ring of fire", I think their manufacturing has moved to China, so earthquakes are less likely to sink that ship.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #34 of 35
Quote:
Originally Posted by nvidia2008 View Post

This is the genius of Apple that is often overlooked. A few years ago during my Apple Reseller days I met and attended a talk by an edu and enterprise speaker from Apple China's HQ in Beijing... A Canadian guy. Back then they were targeting high-end and international schools in China to go one-to-one with MacBooks for students. They already had quite a few schools on board... Apple they knew very much of the upcoming upper middle class and nouveau super-rich.

Only years later would we hear from Tim Cook laying down the game plan... "For emerging markets we're going to target China first and then take everything we learn from there to other countries." And indeed that's how it's been run in Asia. Apple China in charge of greater China and in charge of Apple South Asia which looks after India and South East Asia. Apple Korea probably is under Apple China too.

Japan is separate and was Apple's first foray into Asia. But they've admitted years ago they haven't seen the success they'd like. This was before iPhone, of course. In any case Japan is no longer the jewel in the eye of Western countries, at least in terms of potential Asian customer growth.

My guess is that sometime in the past decade Steve or others had the vision that Japan is old hat and slowly but surely put in a lot of resources into China... Firstly manufacturing of course, as most others jumped on the bandwagon. But they also put in a lot of research into "understanding" Asia by being in China and studying the Chinese. It's a vision that has payed off handsomely, so much so that they are being extra cautious in how they further enter the market. But Apple is no fool, while it dances in the ballroom with the Chinese awaiting a bigger Apple retail presence it's out in the streets samba-ing with the rest of Asia (yes culturally mismatched metaphor but you get my drift), seeing unprecedented growth

Very instructive post. Thanks. It is a great thing that Apple is able to understand how to deal in China. Something American besides Buicks and fast food works there!
post #35 of 35
Quote:
Originally Posted by cloudgazer View Post

What on earth are you raving on about?

If the "wind is blowing" in the direction of an iPad 3, where's the iPhone nano that people have been saying will come out next month every month since January 2008?

Quote:
Originally Posted by Suddenly Newton View Post

Uh...what? A giant statue erection? Honor? Warrior? Heels? A little kid?

Needless to say, the metaphor went over my head and landed with a thud.

The warrior's the iPad. The little kid is any competing tablet.

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