Razor-thin margins have strained Foxconn's relationship with Apple

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  • Reply 21 of 26
    fastasleepfastasleep Posts: 6,487member
    Beats said:
    Beats said:
    I would LOVE to have a company that makes 1% profit of Apple's products.
    Then you clearly never ran a business. I think you’re misinterpreting how this article refers to profit margins. 

    I run a business right now. We malke 30% profit. I'd throw 30% away for .1% of Apple product profit.
    This article does not say that Foxconn makes a single digit's worth of Apple's product profit. It says THEIR profit margin is in the single digits, which is not good. You really don't understand this?
    FileMakerFeller
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  • Reply 22 of 26
    red oak said:
    Apple gross margins have been 40% since 2015

    There is value in being more precise 
    Yes there is - Apples gross margins for the past several years are closer to 38%.
    tmayfastasleep
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  • Reply 23 of 26

    rcfa said:
    What’s next? Moving Apple HQ to China? Would fit the AppStore policies...
    In what way?  With regards to AppStore policies, Apple follows the laws of the country the AppStore is used in...
    fastasleep
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  • Reply 24 of 26
    tmaytmay Posts: 6,470member
    Beats said:
    Beats said:
    I would LOVE to have a company that makes 1% profit of Apple's products.
    Then you clearly never ran a business. I think you’re misinterpreting how this article refers to profit margins. 

    I run a business right now. We malke 30% profit. I'd throw 30% away for .1% of Apple product profit.
    This article does not say that Foxconn makes a single digit's worth of Apple's product profit. It says THEIR profit margin is in the single digits, which is not good. You really don't understand this?
    Profit margin is only relevant when measured against the industry it is part of. Apple is a consumer electronics company; Foxconn is a contract manufacturer. What would you think typical margins are in the auto industry?

    https://www.eulerhermes.com/en_global/news-insights/economic-insights/1198.html

    ​"Profitability remains strong in the automotive sector with an average EBIT margin of 6.0% in 2016. Suppliers reached an average margin of 7.0%, with Italian companies taking the lead (9.0%). Car manufacturers achieved a lower EBIT at 5.5%, with Japanese actors in pole position for the second year in a row."

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  • Reply 25 of 26
    fastasleepfastasleep Posts: 6,487member
    tmay said:
    Beats said:
    Beats said:
    I would LOVE to have a company that makes 1% profit of Apple's products.
    Then you clearly never ran a business. I think you’re misinterpreting how this article refers to profit margins. 

    I run a business right now. We malke 30% profit. I'd throw 30% away for .1% of Apple product profit.
    This article does not say that Foxconn makes a single digit's worth of Apple's product profit. It says THEIR profit margin is in the single digits, which is not good. You really don't understand this?
    Profit margin is only relevant when measured against the industry it is part of. Apple is a consumer electronics company; Foxconn is a contract manufacturer. What would you think typical margins are in the auto industry?

    https://www.eulerhermes.com/en_global/news-insights/economic-insights/1198.html

    ​"Profitability remains strong in the automotive sector with an average EBIT margin of 6.0% in 2016. Suppliers reached an average margin of 7.0%, with Italian companies taking the lead (9.0%). Car manufacturers achieved a lower EBIT at 5.5%, with Japanese actors in pole position for the second year in a row."

    Congrats on missing the point, twice: Beats seems to be implying Foxconn makes a percentage of Apple's profits, which is false. My assertion that their single-digit profit margin being bad is based on this article that we're all commenting on, which states...well just read the headline again maybe?
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  • Reply 26 of 26
    It's hard to know what those profit margins actually mean without a better understanding of how that relates to gross profits across both companies.  In my mind, a smaller percentage of a larger pie can still be a lot more money than the higher margin being associated with Apple.
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