Meanwhile, Nokia (NOK) is launching three Android phones even though the company's handset unit is being sold to Microsoft and the latter is looking to facilitate cheaper Windows phones. The Nokia X will cost €89 and will integrate Microsoft services such as Bing and Skype. The home screen will use tiles, as in Windows phones. Meanwhile, the Nokia X+ is priced at €99 and the XL, with a bigger screen, at €109.
Taiwanese Apple manufacturer Hon Hai Precision Industry (HNHAF) is considering a $40M investment in manufacturing facilities and automation R&D for high-end telecommunications products in Pennsylvania, The WSJ reports.
Sharp (SHCAY -1.3%) and Hon Hai Precision Industry (HNHAF) have scrapped plans to develop smartphones under the Sharp brand in China, in part due to intense competition from local handset manufacturers, The WSJ reports.
Foxconn parent Hon Hai (HNHAF.PK), which is believed to get 60%-70% of its revenue from Apple (AAPL +1.2%), reported a 19% Y/Y drop in calendar Q1 sales to $27B. KGI Securities: "A quarterly decline was expected, but not a yearly decline ... This shows that Hon Hai's revenue depends too much on Apple, and iPhone orders corrected more than expected." Nonetheless, Apple is following the tech sector higher, a possible sign a weak Q1 is priced in.
A downbeat note from Macquarie's Daniel Chang could be contributing to today's Apple (AAPL -2.1%) selloff. Chang, who covers Taiwanese names and is downgrading Foxconn (HNHAF.PK) to Neutral, has lowered his FQ1 (Dec. quarter) iPhone sales forecast to 44M from 48M, and his FQ2 forecast to 26M from 28M. Gene Munster, however, is his usual upbeat self: he notes Piper's latest survey of potential U.S. smartphone buyers found 53.3% thinking of getting an iPhone 5; an October survey reported 54.9%.
More on Apple: The WSJ reports Apple is testing several TV designs with the help of Foxconn (HNHAF.PK) and Sharp (SHCAY.PK). "It isn't a formal project yet. It is still in the early stage of testing," says one source. Reports of an Apple TV set project are nothing new, and Tim Cook's remarks last week bolstered speculation. It still looks as if Apple's biggest challenge won't be building a quality set, but striking necessary deals with content owners and pay-TV providers bent on maintaining the status quo.
Anyone up for more smartphone rumors? Sometimes-accurate Digitimes claims Foxconn has landed orders from Microsoft (MSFT) and Amazon (AMZN) to build smartphones that will launch in mid-2013. Neither tech giant, of course, is new to smartphone speculation (I, II) - multiple sources have reported Microsoft views an internally-developed phone as a backup plan if Q4 Windows Phone 8 launches flop. The first datapoints for Nokia's WP8 Lumia launches are solid, but it's still early in the game.
"It's not easy to make the iPhones. We are falling short of meeting the huge demand," says Foxconn (FXCOF.PK) chairman Terry Gou, suggesting iPhone 5 shortages aren't letting up. Another Foxconn exec made similar remarks last month. Analysts have reported Foxconn has enlisted a division that typically makes non-Apple (AAPL -2.8%) products to help address the shortfall.
"The iPhone 5 is the most difficult device that Foxconn (HNHAF.PK) has ever assembled ... It takes time to learn how to make this new device," says an official for the contract manufacturer, providing color on the manufacturing issues that have contributed to early iPhone 5 (AAPL) supply shortages, and apparently caused labor disruptions as well. The comments come as Apple reportedly increases calendar Q4 iPhone 5 build orders.
Sharp (SHCAY.PK) plans to cut over 10K jobs (18% of its workforce) as part of its restructuring efforts, sources tell Bloomberg. The company also hopes to raise ¥67.6B ($869M) via asset sales that include the unloading of TV plants to Foxconn (HNHAF.PK) and the sale of U.S. solar plant developer Recurrent Energy. Foxconn is still talking with Sharp about an investment, and is reportedly forming plans to enter the TV market. Both companies could figure prominently in any Apple TV launch.
Foxconn shuts one of its Chinese factories after a dormitory brawl escalates into a violent riot involving maybe 2K workers. About 79K work at the Tiayuan plant, which may make the back plate for the new iPhone 5. However, others say Apple has little exposure there. Foxconn falls 2.6% in Hong Kong. Parent Hon Hai falls 1% in Taiwan. AAPL -0.7% premarket.
Just what the slumping TV industry doesn't need: Foxconn (HNHAF.PK) is planning to release "entry-level large-size LCD TVs," Digitimes reports. The contract manufacturing giant, renowned for its ability to drive down production costs, is said to have begun trial production for its sets, but hasn't finalized marketing plans. Foxconn's TV ambitions could spell additional losses for Sharp (SHCAY.PK) and Sony (SNE), and pressure market leader Samsung's (SSNLF.PK) margins.
Sharp (SHCAF.PK) President Takashi Okuda has told Nikkei that he's ready to sell a 9.9% stake in the troubled company to Hon Hai Precision Industry at a lower price than the ¥550 ($7.02) initially agreed to in March, since when Sharp's stock has plummeted. With Sharp relying on creditor banks to refinance billions of dollars in debt, Okuda hopes to complete a deal sharpish.
Hon Hai (HNHAF.PK) chairman Terry Gou left Japan without managing to renegotiate an investment deal with Sharp (SHCAY.PK), local media reports. Hon Hai, parent of contract manufacturing giant Foxconn, wants a lower price tag for the deal due to the bludgeoning Sharp's shares have seen in Tokyo. Hon Hai has hoped the tie-up will lead to lower LCD panel costs, while Sharp has been hoping it will deliver improved operating efficiencies. Both companies are key Apple (AAPL) suppliers.
Sharp (SHCAY.PK) fell 28.1% in Tokyo after warning it expected a ¥100B ($1.28B) operating loss this fiscal year, announcing 5K job cuts, and getting downgraded by Moody's and S&P. In response, Foxconn parent Hon Hai (HNHAF.PK) says it isn't obligated to go through with plans to buy a 9.9% stake in Sharp at a higher price, but Sharp feels differently. The dispute could have implications for Apple (AAPL), which relies on both companies, and might have tapped them to help build a TV.
Topeka's Brian White is providing more Apple TV speculation. White notes an article on a Chinese site suggests Foxconn parent Hon Hai (HNHAF.PK), which just said it would boost its stake in Sharp (SHCAY.PK), plans to take delivery of Sharp LCD panels in Q3, a quarter ahead of schedule. The site believes the order is for panels for Apple TV (AAPL) sets that could arrive this holiday season. (earlier)