1. Background Introduction: It is widely believed that the main purpose of Apple's "capacity transfer plan" is to reduce dependence on the Chinese market, open up the Indian market, and obtain greater profits. However, Foxconn's dilemma and Gou's heartbreak reflect that the plan did not go as smoothly as expected.
Since the reform and opening up of the Chinese market, whether it is Qualcomm, Intel, HP, Apple, Dell and other technology companies, they have seized the opportunity to enter the Chinese market. In particular, Apple, with its powerful performance and smooth experience of the iPhone, has continuously occupied the number one position in the domestic market. However, the rise of Huawei has completely changed this situation, starting from the Mate10 series, Huawei has even surpassed Apple many times to become the world's second largest mobile phone manufacturer with the strength of competing with Apple. Huawei not only has a nearly 56% share in the domestic market, but also has attracted attention in the high-end mobile phone market, and even forced Apple to adjust Foxconn's production capacity to avoid competition with it. However, Huawei has also faced a series of sanctions and obstacles, which have caused a lot of damage to its vitality.
After Huawei was sanctioned, Cook began to implement Apple's "capacity transfer plan", gradually transferring China's production capacity to India and other Southeast Asian regions. The aim is to reduce dependence on the Chinese market and develop the Indian market, which has a large and cheap labor force, in order to reduce costs and obtain greater profits. In order to quickly develop the Indian market and transfer production capacity, Apple has successively removed 44 Chinese companies from the chain, and lobbied Foxconn and Wistron Technology to build factories in India. However, India does not welcome "foundries" such as Foxconn, but prefers to see technology giants with core semiconductor technologies such as Intel, Micron and Nvidia to enter India to promote the development of the local industrial chain. Therefore, the semiconductor factory construction plans of Foxconn and other foundries have been shelved and approved by India** for various reasons.
Mr. Gou has been trying to woo Apple in recent years to get more orders. However, in the end, he was not considered "his own family" by Cook, and even 27% of the orders for the iPhone 15 series this year were allocated to Luxshare and Pegatron. Cook doesn't seem to want to rely too much on Foxconn as a foundry and is marginalizing it. Although Foxconn is still the foundry with the most orders from Apple, Terry Gou has publicly stated that "building a factory in the mainland is to reward the mainland", resulting in a serious decline in the reputation and image of the mainland market. Now, Cook has officially stated that the machines with quality control problems are not made in the Indian factory, but in the mainland factory, which is actually putting the blame on Foxconn.
1. Huawei's rise and Apple's dilemma
With its outstanding technical strength and innovation capabilities, Huawei has rapidly emerged as an important force in the global mobile phone market. Huawei's strong rise has not only challenged Apple's position, but also forced it to look for new markets and opportunities to avoid over-reliance on the Chinese market. However, Huawei has also encountered a series of problems, including technology blockades, sanctions and political pressure, which have hindered its development in overseas markets.
2. Apple's capacity transfer plan
In order to reduce its dependence on the Chinese market and expand new market opportunities, Apple has begun to implement a capacity transfer plan to gradually transfer production capacity from China to India and other Southeast Asian regions. The aim was to reduce production costs, make more profits, and tap into the Indian market, which has a large and cheap labor force. However, India does not welcome traditional foundries, but prefers to introduce technology giants with core semiconductor technology to promote the development of India's local industrial chain.
3. Foxconn's dilemma
Foxconn, as one of Apple's main foundries, is the foundry that has received the most orders from Apple. However, Gou's remarks and actions in recent years have seriously affected his reputation and image in the mainland market. Although Gou has been courting Apple, he did not win Cook's trust and favor in the end. Apple allocated orders to other ** merchants, which made Foxconn suffer from a squeeze on market share and face a dilemma.
4. Quality control problems in Apple's Indian factory
As an emerging market, India has always been favored by Apple as one of the destinations for capacity transfer because of its advantage of cheap labor. However, the Indian factory had a series of quality control problems, such as quality issues such as paint loss, ash ingress and scratches. These issues have seriously affected Apple's reputation and brand image in the Indian market. Although Cook understood the root of these problems, in order to save face in the "open up the Indian market" strategy, he declared that the problems were not made by Indian factories, but by mainland factories. Such a statement actually puts the blame on Foxconn, making it a "backstabber".
In order to get more orders, Terry Gou has been courting Apple, even at the expense of transferring production capacity and funds from the mainland. However, the rise of Huawei, Luxshare Precision, BYD and other companies has led to Foxconn's market share being squeezed and its market position gradually declining. Mr. Gou's remarks and actions have also damaged Foxconn's reputation and image in the mainland market. At the same time, Apple is also seeking to reduce its dependence on Foxconn, allocating orders to other leading companies and marginalizing Foxconn. The effects and consequences of these issues include:
1.Foxconn's declining market share: Squeezed by competitors such as Huawei, Foxconn's market share is declining, and profits may also be affected.
2.Foxconn's relationship with Apple deteriorated: Gou's efforts did not earn Cook's trust and support, but instead led to the weakening of Foxconn's position in the Apple chain.
3.Apple's reputation in the Indian market is damaged: Apple's reputation and brand image in the Indian market have been damaged by quality control issues with Apple products produced in India.
4.Apple's capacity transfer plans are blocked: India** does not welcome traditional foundries, and Apple's plans to establish a production base in India may be hindered or delayed, making it difficult for Apple to expand into the Indian market.
1.Improve quality control: Foxconn needs to strengthen the control of the production process and product quality, improve the level of quality control, and solve the quality problems existing in the Indian factory to restore Apple's reputation and brand image in the Indian market.
2.Promote technological upgrading: Foxconn can actively invest in research and development, promote technological upgrading and innovation, and improve product competitiveness to maintain a competitive advantage in market competition.
3.Find new market opportunities: Foxconn can look for new market opportunities, reduce its dependence on Apple, and develop other customers and partners to diversify risks and expand its business.
4.Strengthen cooperation with Apple: Foxconn can strengthen communication and cooperation with Apple, provide better service and support, win more orders, and resume the cooperative relationship with Apple.
5.Increase overseas investment: Foxconn can increase investment in overseas operations and find new destinations for capacity transfer, such as Southeast Asia, to reduce dependence on the Chinese market and explore new market opportunities.
To sum up, the dilemma faced by Foxconn and the heartbreak of Gou reflect that Apple's "capacity transfer plan" is not going smoothly. Huawei's rise and Gou's remarks and actions have had a negative impact on Foxconn's market share and image. Foxconn's position in the mainland market is gradually declining, and Apple is also looking to reduce its dependence on Foxconn. Apple's quality control problems in the Indian market have also made it difficult for Apple's capacity transfer plan. To solve the above problems, Foxconn can strengthen quality control, technology upgrades, find new market opportunities and increase overseas investment, and strengthen cooperation with Apple to meet challenges and obtain more opportunities.