Foxconn, tech’s biggest contract manufacturer, today became the latest company to recognise the new reality of a divided world for its products, announcing it would have to separate its supply chains.
“No matter if it’s India, south-east Asia or the Americas, there will be a manufacturing ecosystem in each,” Foxconn’s chairman Liu Young-way told reporters following its latest earnings report. While China would still play a key role, the country’s “days as the world’s factory are done”, Bloomberg reported him as saying.
The Taiwanese company had reported a 34 per cent jump in net profit for the second quarter. Kathrin Hille in Taipei reports the stronger-than-expected results pointed to another shift Foxconn was making — it is retuning its business model to reduce dependency on the low-margin, labour-intensive assembly of mass-market products such as Apple’s iPhone in order to diversify towards higher-margin products such as components for industrial automation and driverless vehicles.
It already faces insurgents in the iPhone space such as China’s Luxshare, and as our #techAsia newsletter reports today, Apple itself could struggle in China with smartphone users saying they are likely to dump its handset if it fails to include the Tencent WeChat app that President Trump has decided to ban. Analysts have warned global iPhone unit shipments could fall by as much as 30 per cent.
With the ban not due to come in until next month, Tencent’s earnings powered ahead today. Shoppers returning to markets and malls and using WeChat to pay helped lift its fintech revenues 30 per cent from a year earlier and 13 per cent from the first quarter.
The Internet of (Five) Things
1. Airbnb IPO up next
Airbnb plans to file paperwork later this month for its long-awaited IPO, according to the Wall St Journal. We reported on a management shake-up last month and how plans had been revived to launch an initial public offering, as the home-sharing service continued to see signs of a rebound from coronavirus disruption.
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2. Malone strikes in Switzerland
Cable mogul John Malone’s Liberty Global is buying Swiss mobile group Sunrise for SFr6.8bn ($7.4bn) including debt in a landmark tie-up for the country’s telecoms sector. Lex says its all-cash offer throws Sunrise’s failed attempt to buy Liberty’s fixed-line Swiss operator UPC into reverse. It also suggests neither side can see many options for growth beyond the benefits of consolidation.
3. Just Eat Takeaway.com dines out on lockdown pangs
The first results from the newly merged food delivery group showed revenues increased 44 per cent year-on-year in the first half as it benefited from all that ordering in under lockdown. Lex says JET’s post-tax loss of €158m, compared with €27m in the first half of 2019, was mostly due to acquisition costs, and it is on track to be one of the few profitable players in the industry.
4. Media mogul Sumner Redstone dead at 97
The man who popularised the term “content is king”, and whose media empire family feuds helped inspire characters in HBO’s Succession, has died at the age of 97. Sumner Redstone transformed a regional drive-in cinema chain into a global entertainment empire spanning the Paramount film studio and two of the most prominent US media companies: Viacom, home to MTV and Cartoon Network, and the broadcaster CBS. Here’s our obituary.
5. Epic and Unity rev game engines
The two biggest independent makers of the engines that power video games, Unity Technologies and Epic Games, are stepping up their financing efforts. Tim Bradshaw reports investors in Unity and Epic are betting that their 3D graphics tools will shape the next generation of entertainment, from video games and new forms of online socialising to Hollywood movies and TV shows.
Tech tools — Microsoft’s Surface Duo
Available for pre-order in the US at a hefty $1,399 starting today, Surface Duo is a dual-screen device from Microsoft that runs Android mobile apps rather than Windows programs. Some examples from Microsoft on how to use this: “Join a Microsoft Teams meeting and see participants on one screen while you present your PowerPoint slides on another. Open the Amazon Kindle app and read a book like a book. Position Surface Duo’s screen like a tent and watch a video hands-free.” Ars Technica has a full rundown on Microsoft’s first Android phone and its first handset in quite a while.
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