bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

additionalInfoBoxes

quizIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

The new iPhone is seen as a blessing for contract manufacturers but a threat to leading players Nokia and Motorola

Apple's move into the mobile handset market with its iPhone has triggered investor demand for Taiwan's Foxconn and other manufacturers that may benefit from a product  estimated to win about 1 per cent of the 1.1 billion units  in the global mobile handset market by  next year.

Analysts  are also looking to pinpoint potential losers in the event  the sleek iPhone undermines  demand for rival phones.

'Hon Hai and its handset-making unit, Foxconn International Holdings, will be the most likely choice for Apple's contract,' said Michael Wong, research director at Hantec Investment International.

The new product, which combines telephone, data transfer and multimedia functions manipulated via a touch screen, will be available in the United States from June at US$499 with  four gigabytes of storage or US$599 with  eight gigabytes.

Foxconn International, which already assembles iPod music players for Apple, also featured among other potential Taiwan-based winners indicated by Goldman Sachs analyst Henry King.

'We believe the potential supplier candidates along the iPhone food chain  that could benefit from the iPhone theme story include Hon Hai, Catcher, Largan, TXC, Foxconn Tech of Taiwan whose main business is handset casing, Unimicron, and Nanya PCB,' Mr King said in a report  last week. Foxconn Technology makes handsets and iPod casings, among other products.

Investors reacted to the iPhone launch by driving up shares of Foxconn International  4 per cent to HK$24.85  on Thursday last week and a further 1.2 per cent to HK$25.15 on Friday.

'We plan to sell 10 million units of iPhone in 2008 and capture about 1 per cent of the cell-phone market,' said Apple chief executive Steve Jobs at the January 9 launch. A Merrill Lynch report said Apple's expectation  of the sales of iPhone  next year was realistic.

While Hon Hai and Foxconn International, its Hong Kong-listed unit, are the hottest candidates to be the leading suppliers of the phone, both companies declined to confirm any deal.

'We do not know whether Hon Hai can get an iPhone contract, but if it really happens it will probably ask Foxconn to help in  manufacturing and logistics rather than outsource to other companies,' said Foxconn International spokesman  Vincent Tong.

Apple has devoted considerable effort over the past 21/2  years to keep its iPhone project secret. Senior management were not allowed to talk about the project with other people, including family members, while the company's closest partners, such as US telecommunications operator Cingular and Web search engines Yahoo and Google could see the real iPhone only shortly before the launch.

Foxconn International, the world's largest handset contract  maker, underlined the importance of confidentiality in its dealings with customers, which include Nokia, Motorola and Sony Ericsson.

Merrill Lynch analyst Tong Tseng also included Foxconn Technology on his list of likely winners.

'Besides Hon Hai and Foxconn Technology, Taiwan companies such as Catcher Technology, Cheng Uei Precision Industry, Tripod and [lens maker] Largan may also provide parts for Apple's iPhone,' he said.

Catcher Technology, which makes the case of the low-end iPod Shuffle, should enjoy a net incremental benefit from iPhone without cannibalising its existing iPod business, according to Goldman Sachs.

Mr King saw the introduction of the iPhone as being 'negative to middle-segment and high-end handset makers'.

'But as the launch of iPhone would be in the US only, with Cingular the exclusive carrier at the beginning, we expect that the fundamental impact in the near term  on other handset makers would be limited,' the Taiwan-based analyst said.

Possible losers include leading mobile phone makers Nokia and Motorola if consumers are lured away by the iPhone's touch-screen features. Meanwhile, investors have sold down shares of Research In Motion, the Canada-based maker of the business-orientated Blackberry smartphone.

Shares of Hon Hai, whose customers include Hewlett-Packard and IBM, rose 0.4 per cent to close at NT$234 (HK$55.71) on  Wednesday last weekand added 1.9 per cent to NT$238.5  last Friday.

Foxconn International's first-half sales soared 84 per cent last year to US$4.38 billion. Net profit doubled to US$300 million.

Apple underlined the importance it now places on consumer products such as the iPhone and the iPod music player by  dropping the word 'Computer'  from the company name.

Foxconn Technology, like Catcher,  will be aiming to be a key supplier of iPhone casings, although as a maker of Nintendo's Wii console, the contribution to revenue from the Apple product may be less in percentage terms than Catcher's  gains.

Taiwan-based TXC Corp, a crystal oscillator maker, already supplies Apple with products for the iPod while Unimicron provides  printed circuit boards. Tripod is also a PCB maker in Taiwan.

Cheng Uei Precision makes connectors, cable assemblies and power packs used in computers and handsets under the Foxlink brand name.



Suppliers wait for Apple to call