The quality of the analyst's report aside (it's very superficial as many have noted and doesn't even allude to many important variables), the discussion of Foxconn in general raises two questions to me.
The first is already alluded to above, i.e., when will Foxconn use all of its accumulated production experience to start competing directly with some or all of these companies it's a subcontractor for, knowing everything it does about all of their designs, processes, etc.? And theft (and near theft) of intellectual property in the "new China" is no more news these days than dog bites man.
I think "when" is a better word than "if," as this has happened with US industries and Asian suppliers many (many) times before since WWII, after all, and as noted by NOFEER, Foxconn is not exactly without some heft.
And second, since Apple's superior build quality to most of the other companies mentioned as FC clients is well-known (and constantly discussed here), how ironic is it that many of their products are all assembled in the same "shop" (yes I know Foxconn has many plants and separate production lines - but they are one company).
I mean, seriously, how does this work, i.e., slap-dash hash work on cheap Dells and precision, high-quality finishing on Macs? Is the difference all in the parts bin and original design specs, or do they actually put more focus on the Apple assembly lines? Or is there less diff in build quality than we actually think?
7, 10, 18 - Those were the Posts ## here that made my points for me... And same with most other posts...
As to "Foxconn - Stealing from Apple?!"... Let's have some fun with this crazy scenario:
Let's say, Foxconn or anyone in China steals Apple's IP, products and start making them under their own name...
China's Government would say: we got nukes, big army, sosumi!
Apple moves their production elsewhere, and split it between a few locations (same eggs, more baskets)
Will the world be buying Chinese clones of Apple stuff, as China says: trust us, we stole Apple's blueprints, we are exactly the same, just ? cheeper ?... Even if they did do that, the world wouldn't go for that, and here is why:
When it comes to toilet paper at a 99c Stores, or socks, or underwear etc., that's different than buying a piece of electronic that one needs to have ? confidence ? in, knowing that it will work, and if it doesn't, that there is great support for it! Apple ? delivers ? that fidence ?! As I stopped by at NYC's 5th Ave Store on this past Sunday, 3/13/11, it was very crowded at 9 PM. Lines at the ? cash registers ?, lines to play with iPad 2 and other products! NOBODY will be able to replicate such ? confidence ? no matter how cheaply the sell their clones... And... The clones will be temporary, because the Next Apple Products will make those clones look bad, and worse with the following Product Updates!
BTW, ? cheeper ? is my deliberate misspelling of ? cheaper ? to remind us of bad manuals, typos, English by foreigners etc... Apple is not know, I think, for such weaknesses...
If China, or any Chinese Manufacturer stole from Apple in such blatant Sosumi way, they'd lose the ? confidence ? , trust from all other international customers! Those customers would say to themselves: if China could do that to Apple who is huge, what would China do to us!!! BTW, by "China" I don't mean that All China is the same.. Obviously I am generalizing, as I am trying to make such INSANE SCENARIO as silly as possible, as quickly as I can!
BTW, at that 5th Ave store, I picked my New Extended Keyboard (wired)! The salesman took my card right there on the floor, no need to wait on line! He swiped it, and my Receipt was mailed to my .mac/.me.com address, cause I already have my iTunes Account! Then we plugged the keyboard into my Laptop to make sure it worked! Then we plugged my dead keyboard into iMac, and my dead keyboard was dead... No such stellar support anywhere else, never mind 99c stores! The only problem - I just ADORE my new keyboard, and, as you see, I now really enjoy typing!
Chinese Knock Offs are for Blackmarket, and mostly in China... At worst, they'll be sold illegally, quietly, and most people would avoid them, because they won't resell as well as the ? authentic ? Apple products!
7, 10, 18 - Those were the Posts ## here that made my points for me... And same with most other posts...
As to "Foxconn - Stealing from Apple?!"... Let's have some fun with this crazy scenario:
Let's say, Foxconn or anyone in China steals Apple's IP, products and start making them under their own name...
China's Government would say: we got nukes, big army, sosumi!
Apple moves their production elsewhere, and split it between a few locations (same eggs, more baskets)
Will the world be buying Chinese clones of Apple stuff, as China says: trust us, we stole Apple's blueprints, we are exactly the same, just • cheeper •... Even if they did do that, the world wouldn't go for that, and here is why:
When it comes to toilet paper at a 99c Stores, or socks, or underwear etc., that's different than buying a piece of electronic that one needs to have • confidence • in, knowing that it will work, and if it doesn't, that there is great support for it! Apple • delivers • that fidence •! As I stopped by at NYC's 5th Ave Store on this past Sunday, 3/13/11, it was very crowded at 9 PM. Lines at the • cash registers •, lines to play with iPad 2 and other products! NOBODY will be able to replicate such • confidence • no matter how cheaply the sell their clones... And... The clones will be temporary, because the Next Apple Products will make those clones look bad, and worse with the following Product Updates!
BTW, • cheeper • is my deliberate misspelling of • cheaper • to remind us of bad manuals, typos, English by foreigners etc... Apple is not know, I think, for such weaknesses...
If China, or any Chinese Manufacturer stole from Apple in such blatant Sosumi way, they'd lose the • confidence • , trust from all other international customers! Those customers would say to themselves: if China could do that to Apple who is huge, what would China do to us!!! BTW, by "China" I don't mean that All China is the same.. Obviously I am generalizing, as I am trying to make such INSANE SCENARIO as silly as possible, as quickly as I can!
BTW, at that 5th Ave store, I picked my New Extended Keyboard (wired)! The salesman took my card right there on the floor, no need to wait on line! He swiped it, and my Receipt was mailed to my .mac/.me.com address, cause I already have my iTunes Account! Then we plugged the keyboard into my Laptop to make sure it worked! Then we plugged my dead keyboard into iMac, and my dead keyboard was dead... No such stellar support anywhere else, never mind 99c stores! The only problem - I just ADORE my new keyboard, and, as you see, I now really enjoy typing!
Chinese Knock Offs are for Blackmarket, and mostly in China... At worst, they'll be sold illegally, quietly, and most people would avoid them, because they won't resell as well as the • authentic • Apple products!
In short, the Sky is NOT Falling!
There's some things you're arguing with me about that I didn't imply, and some that is direct is arguable. I won't go tit-for-tat, but will note that for one thing, "IP" is a pretty slippery concept, especially in the software arena, and the lines between reverse engineering, adaptation and "equivalency" are the subjects of many, many ongoing legal cases.
Second, I'm not talking about the knock-off market (I've seen "ePods" and the like in flea markets, and of course, they're utter crap), but anyone who thinks Foxconn (for one) can't also take everything it's learned, throw some of the many highly talented and educated folk they're graduating at a much higher rate than the US (and the gap scientific and technical education is only increasing) and start to branch into making their own branded products - which might well be favored by the Chinese gov't for the home market (for starters) - is living in a fool's paradise. India knows how to grow a technical cadre as well. And they don't even need the US market (a declining share of the world's markets) to do very well.
And not all of such products need be knockoffs, clones or even in the mold of what's gone before. There is nothing inherent in the notion that all computing innovations, devices, programs, platforms, etc. will always come from the US.
Third, China has in fact given lip service - many times - to real complaints from many US industries brought to them by the US gov't, promised crack downs and then continued a wink-wink approach even as blatantly "in your face" practices have continued.
Fourth, nobody's (well at least I'm not) predicting the demise of Apple in particular for a good long while yet, if ever, but I was referring to all FC (and other companies) are learning from that LONG US client list and pride always goes before a fall, even if the process occurs over decades as it did in the auto and television industries.
It was Feb.22 when Vincent Chen, an analyst at Yuanta, said the Ipad 2 would not be released till the Summer 2011, due to production issues at Hon Hai(Foxconn). He was wrong. After working on Wall Street for 20yrs, I can tell you first hand that any sell-side analyst worth his salt is working on the buy-side
I was just in an Apple store and it was packed with consumers, thats much more relevant then a downgrade from an analyst on the biggest down day of the year.
here's an idea... since apple is all about controlling the total experience from software to hardware, why not go ALL IN and dip into their 43B warchest, build some manufacturing plants HERE in the USA where WE NEED JOBS and won't have to worry about people dying in factories.
First, no company on the overwhelming scale of Foxconn can keep up THAT kind of growth rate in manufacturing forever. If Apple indeed has failed to line up alternatives, then it has been negligent. Perhaps it's time for Apple to use some of that cash hoard to reestablish US manufacturing, either internally (unlikely) or through a spinoff or joint venture with someone else (better fits Tim Cook's business model).
Second, talking of Tim Cook, Apple's recent MO on supplies has been to lock down large contracts and effectively dry up supply of components for its competitors. While the iPad shortages are worrying, it's probably also likely that other manufacturers will be hurting too given how Cook tends to at least try to fence off the supply chain from Apple's competitors.
There's some things you're arguing with me about that I didn't imply, and some that is direct is arguable. I won't go tit-for-tat, but will note that for one thing, "IP" is a pretty slippery concept, especially in the software arena, and the lines between reverse engineering, adaptation and "equivalency" are the subjects of many, many ongoing legal cases.
Second, I'm not talking about the knock-off market (I've seen "ePods" and the like in flea markets, and of course, they're utter crap), but anyone who thinks Foxconn (for one) can't also take everything it's learned, throw some of the many highly talented and educated folk they're graduating at a much higher rate than the US (and the gap scientific and technical education is only increasing) and start to branch into making their own branded products - which might well be favored by the Chinese gov't for the home market (for starters) - is living in a fool's paradise. India knows how to grow a technical cadre as well. And they don't even need the US market (a declining share of the world's markets) to do very well.
And not all of such products need be knockoffs, clones or even in the mold of what's gone before. There is nothing inherent in the notion that all computing innovations, devices, programs, platforms, etc. will always come from the US.
Third, China has in fact given lip service - many times - to real complaints from many US industries brought to them by the US gov't, promised crack downs and then continued a wink-wink approach even as blatantly "in your face" practices have continued.
Fourth, nobody's (well at least I'm not) predicting the demise of Apple in particular for a good long while yet, if ever, but I was referring to all FC (and other companies) are learning from that LONG US client list and pride always goes before a fall, even if the process occurs over decades as it did in the auto and television industries.
Thanks for your Reply... I didn't mean to ? argue ?, I was just thinking aloud... I do actually like your point, and how eloquently you make them... I just think that our views on this topic are part different sides of the same coin, both are valid...
It'll be a while before China, India and others will be self-contained enough that they will be able to sell their products mostly domestically... To buy those products people will need money... My guess is that most people in China can't afford high priced electronics... That guess of mine is based on the the very reason why Apple and others manufacture electronics there, cause the cost of labor is cheap!!! And in that case, if the workers get paid little, they have little money to spend! Yes, I know I am generalizing, but I am probably thinking in the right direction...
Apple Brand is snowballing, it's status symbol... But, I'll spare us from propaganda!
Again, I like your points, the nuances... We are both right, and we just don't know how long it'll take to see who is more right between us!
Another item - China, more than India are yet to go through their Democracy Volcano's... Their people will demand more economically and politically... That turmoil will slow them down... No wonder China and others are buying US Bonds etc. on Wall Street, cause US, with all its problems is ? stable ?, safe place to invest!!! India, like China, got their issues...
With all the US issues, Apple's Echo System with Cloud etc. will be ahead by far, while others will be managing their revolutions...
If you watch "Now Playing: D8: Steve Jobs Onstage: Full-length Video (1:35:53" at http://d8.allthingsd.com/speakers/steve-jobs/ you'll find a hint of the actual Apple TV, or at least BIG CHANGES coming to that field... Cable Companies http://bit.ly/gsZSB1 are already jumping on iPads, Tablets! They want our Eyeballs and Clicks on the go... It'll cost us $$ to pay for such Bandwidth here in US...., but it'll be even harder for average Chinese and Indians to afford such costs...
Oops... We can talk about that stuff endlessly, right!?
Comments
The quality of the analyst's report aside (it's very superficial as many have noted and doesn't even allude to many important variables), the discussion of Foxconn in general raises two questions to me.
The first is already alluded to above, i.e., when will Foxconn use all of its accumulated production experience to start competing directly with some or all of these companies it's a subcontractor for, knowing everything it does about all of their designs, processes, etc.? And theft (and near theft) of intellectual property in the "new China" is no more news these days than dog bites man.
I think "when" is a better word than "if," as this has happened with US industries and Asian suppliers many (many) times before since WWII, after all, and as noted by NOFEER, Foxconn is not exactly without some heft.
And second, since Apple's superior build quality to most of the other companies mentioned as FC clients is well-known (and constantly discussed here), how ironic is it that many of their products are all assembled in the same "shop" (yes I know Foxconn has many plants and separate production lines - but they are one company).
I mean, seriously, how does this work, i.e., slap-dash hash work on cheap Dells and precision, high-quality finishing on Macs? Is the difference all in the parts bin and original design specs, or do they actually put more focus on the Apple assembly lines? Or is there less diff in build quality than we actually think?
7, 10, 18 - Those were the Posts ## here that made my points for me... And same with most other posts...
As to "Foxconn - Stealing from Apple?
- Let's say, Foxconn or anyone in China steals Apple's IP, products and start making them under their own name...
- China's Government would say: we got nukes, big army, sosumi
!
- Apple moves their production elsewhere, and split it between a few locations (same eggs, more baskets)
- Will the world be buying Chinese clones of Apple stuff, as China says: trust us, we stole Apple's blueprints, we are exactly the same, just ? cheeper ?... Even if they did do that, the world wouldn't go for that, and here is why:
- When it comes to toilet paper at a 99c Stores, or socks, or underwear etc., that's different than buying a piece of electronic that one needs to have ? confidence ? in, knowing that it will work, and if it doesn't, that there is great support for it! Apple ? delivers ? that fidence ?! As I stopped by at NYC's 5th Ave Store on this past Sunday, 3/13/11, it was very crowded at 9 PM. Lines at the ? cash registers ?, lines to play with iPad 2 and other products! NOBODY will be able to replicate such ? confidence ? no matter how cheaply the sell their clones... And... The clones will be temporary, because the Next Apple Products will make those clones look bad, and worse with the following Product Updates!
- BTW, ? cheeper ? is my deliberate misspelling of ? cheaper ? to remind us of bad manuals, typos, English by foreigners etc... Apple is not know, I think, for such weaknesses...
If China, or any Chinese Manufacturer stole from Apple in such blatant Sosumi way, they'd lose the ? confidence ? , trust from all other international customers! Those customers would say to themselves: if China could do that to Apple who is huge, what would China do to us!!! BTW, by "China" I don't mean that All China is the same.. Obviously I am generalizing, as I am trying to make such INSANE SCENARIO as silly as possible, as quickly as I canBTW, at that 5th Ave store, I picked my New Extended Keyboard (wired)! The salesman took my card right there on the floor, no need to wait on line! He swiped it, and my Receipt was mailed to my .mac/.me.com address, cause I already have my iTunes Account
Chinese Knock Offs are for Blackmarket, and mostly in China... At worst, they'll be sold illegally, quietly, and most people would avoid them, because they won't resell as well as the ? authentic ? Apple products!
In short, the Sky is NOT Falling!
7, 10, 18 - Those were the Posts ## here that made my points for me... And same with most other posts...
As to "Foxconn - Stealing from Apple?
- Let's say, Foxconn or anyone in China steals Apple's IP, products and start making them under their own name...
- China's Government would say: we got nukes, big army, sosumi
!
- Apple moves their production elsewhere, and split it between a few locations (same eggs, more baskets)
- Will the world be buying Chinese clones of Apple stuff, as China says: trust us, we stole Apple's blueprints, we are exactly the same, just • cheeper •... Even if they did do that, the world wouldn't go for that, and here is why:
- When it comes to toilet paper at a 99c Stores, or socks, or underwear etc., that's different than buying a piece of electronic that one needs to have • confidence • in, knowing that it will work, and if it doesn't, that there is great support for it! Apple • delivers • that fidence •! As I stopped by at NYC's 5th Ave Store on this past Sunday, 3/13/11, it was very crowded at 9 PM. Lines at the • cash registers •, lines to play with iPad 2 and other products! NOBODY will be able to replicate such • confidence • no matter how cheaply the sell their clones... And... The clones will be temporary, because the Next Apple Products will make those clones look bad, and worse with the following Product Updates!
- BTW, • cheeper • is my deliberate misspelling of • cheaper • to remind us of bad manuals, typos, English by foreigners etc... Apple is not know, I think, for such weaknesses...
If China, or any Chinese Manufacturer stole from Apple in such blatant Sosumi way, they'd lose the • confidence • , trust from all other international customers! Those customers would say to themselves: if China could do that to Apple who is huge, what would China do to us!!! BTW, by "China" I don't mean that All China is the same.. Obviously I am generalizing, as I am trying to make such INSANE SCENARIO as silly as possible, as quickly as I canBTW, at that 5th Ave store, I picked my New Extended Keyboard (wired)! The salesman took my card right there on the floor, no need to wait on line! He swiped it, and my Receipt was mailed to my .mac/.me.com address, cause I already have my iTunes Account
Chinese Knock Offs are for Blackmarket, and mostly in China... At worst, they'll be sold illegally, quietly, and most people would avoid them, because they won't resell as well as the • authentic • Apple products!
In short, the Sky is NOT Falling!
There's some things you're arguing with me about that I didn't imply, and some that is direct is arguable. I won't go tit-for-tat, but will note that for one thing, "IP" is a pretty slippery concept, especially in the software arena, and the lines between reverse engineering, adaptation and "equivalency" are the subjects of many, many ongoing legal cases.
Second, I'm not talking about the knock-off market (I've seen "ePods" and the like in flea markets, and of course, they're utter crap), but anyone who thinks Foxconn (for one) can't also take everything it's learned, throw some of the many highly talented and educated folk they're graduating at a much higher rate than the US (and the gap scientific and technical education is only increasing) and start to branch into making their own branded products - which might well be favored by the Chinese gov't for the home market (for starters) - is living in a fool's paradise. India knows how to grow a technical cadre as well. And they don't even need the US market (a declining share of the world's markets) to do very well.
And not all of such products need be knockoffs, clones or even in the mold of what's gone before. There is nothing inherent in the notion that all computing innovations, devices, programs, platforms, etc. will always come from the US.
Third, China has in fact given lip service - many times - to real complaints from many US industries brought to them by the US gov't, promised crack downs and then continued a wink-wink approach even as blatantly "in your face" practices have continued.
Fourth, nobody's (well at least I'm not) predicting the demise of Apple in particular for a good long while yet, if ever, but I was referring to all FC (and other companies) are learning from that LONG US client list and pride always goes before a fall, even if the process occurs over decades as it did in the auto and television industries.
I was just in an Apple store and it was packed with consumers, thats much more relevant then a downgrade from an analyst on the biggest down day of the year.
First, no company on the overwhelming scale of Foxconn can keep up THAT kind of growth rate in manufacturing forever. If Apple indeed has failed to line up alternatives, then it has been negligent. Perhaps it's time for Apple to use some of that cash hoard to reestablish US manufacturing, either internally (unlikely) or through a spinoff or joint venture with someone else (better fits Tim Cook's business model).
Second, talking of Tim Cook, Apple's recent MO on supplies has been to lock down large contracts and effectively dry up supply of components for its competitors. While the iPad shortages are worrying, it's probably also likely that other manufacturers will be hurting too given how Cook tends to at least try to fence off the supply chain from Apple's competitors.
There's some things you're arguing with me about that I didn't imply, and some that is direct is arguable. I won't go tit-for-tat, but will note that for one thing, "IP" is a pretty slippery concept, especially in the software arena, and the lines between reverse engineering, adaptation and "equivalency" are the subjects of many, many ongoing legal cases.
Second, I'm not talking about the knock-off market (I've seen "ePods" and the like in flea markets, and of course, they're utter crap), but anyone who thinks Foxconn (for one) can't also take everything it's learned, throw some of the many highly talented and educated folk they're graduating at a much higher rate than the US (and the gap scientific and technical education is only increasing) and start to branch into making their own branded products - which might well be favored by the Chinese gov't for the home market (for starters) - is living in a fool's paradise. India knows how to grow a technical cadre as well. And they don't even need the US market (a declining share of the world's markets) to do very well.
And not all of such products need be knockoffs, clones or even in the mold of what's gone before. There is nothing inherent in the notion that all computing innovations, devices, programs, platforms, etc. will always come from the US.
Third, China has in fact given lip service - many times - to real complaints from many US industries brought to them by the US gov't, promised crack downs and then continued a wink-wink approach even as blatantly "in your face" practices have continued.
Fourth, nobody's (well at least I'm not) predicting the demise of Apple in particular for a good long while yet, if ever, but I was referring to all FC (and other companies) are learning from that LONG US client list and pride always goes before a fall, even if the process occurs over decades as it did in the auto and television industries.
Thanks for your Reply... I didn't mean to ? argue ?, I was just thinking aloud... I do actually like your point, and how eloquently you make them... I just think that our views on this topic are part different sides of the same coin, both are valid...
It'll be a while before China, India and others will be self-contained enough that they will be able to sell their products mostly domestically... To buy those products people will need money... My guess is that most people in China can't afford high priced electronics... That guess of mine is based on the the very reason why Apple and others manufacture electronics there, cause the cost of labor is cheap!!! And in that case, if the workers get paid little, they have little money to spend! Yes, I know I am generalizing, but I am probably thinking in the right direction...
Apple Brand is snowballing, it's status symbol... But, I'll spare us from propaganda
Again, I like your points, the nuances... We are both right, and we just don't know how long it'll take to see who is more right between us
Another item - China, more than India are yet to go through their Democracy Volcano's... Their people will demand more economically and politically... That turmoil will slow them down... No wonder China and others are buying US Bonds etc. on Wall Street, cause US, with all its problems is ? stable ?, safe place to invest!!! India, like China, got their issues...
With all the US issues, Apple's Echo System with Cloud etc. will be ahead by far, while others will be managing their revolutions...
If you watch "Now Playing: D8: Steve Jobs Onstage: Full-length Video (1:35:53" at http://d8.allthingsd.com/speakers/steve-jobs/ you'll find a hint of the actual Apple TV, or at least BIG CHANGES coming to that field... Cable Companies http://bit.ly/gsZSB1 are already jumping on iPads, Tablets! They want our Eyeballs and Clicks on the go... It'll cost us $$ to pay for such Bandwidth here in US...., but it'll be even harder for average Chinese and Indians to afford such costs...
Oops... We can talk about that stuff endlessly, right
Lucky are those who were able to Buy more AAPL:
http://www.google.com/finance?client=ig&q=AAPL
330.01 -15.42 (-4.46%)
After Hours: 326.90 -3.11 (-0.94%)
Mar 16, 7:59PM EDT
Apple will be fine, Japan will re-build....
iPad 2 & The Future of Tablets! Charlie Rose! http://bit.ly/hBGbQQ
Let's all be HEALTHY and HAPPY!!!
Thanks again for your Reply!