It looks like Apple and its Asian partners are getting ready to shift into high gear with the production of the much-anticipated iPhone 6, with more than a hundred thousand job offers on the line.
Citing a report by Taiwan's Economic Daily News, Reuters says Hon Hai Precision Industry, better known as Foxconn, is all set to hire more than 100,000 people in its facilities in Shenzhen, Zhengzhou, Chengdu, Guiyang and other production bases in mainland China to allow the Apple supplier to meet the projected demand for the up and coming but still unannounced iPhone 6. The report also says Foxconn, which is said to be responsible for 70% of the iPhone 6 assembly line, broke its own record for hiring the biggest number of new recruits in its entire history.
Pegatron, another Taiwanese manufacturer, also announced a mass job hiring for an undisclosed number of jobs for its factory in Kunshan. Pegatron, which was the primary supplier for the low-cost iPhone 5C, will take care of the remaining 30% of the production. Just last year, Pegatron announced another similar hiring spree that led to a 40% growth in its workforce due to its role as the main supplier for the iPhone 5C.
Supply-chain sources not authorized to speak with the matter said last week that Foxconn is currently conducting trial runs for the mass production of the iPhone 6 that will start in July.
Last month, long-time Apple follower and analyst Katy Huberty of Morgan Stanley took a trip to the Far East to visit Apple's suppliers, who told her that they were expecting a 20% increase from last year's sales of the iPhone 5s, which could most likely be due to the rumored larger display for the iPhone 6 and a phablet version to come later in the year. Larger screen smartphones are the fastest-growing segment in the smartphone industry, with customers preferring one device with a big screen to accommodate most activities rather than purchasing separate devices.
While Apple does not provide a breakdown of iPhone sales by model, the company noted that sales of the iPhone grew by 6.7% by the end of 2013. This is a smaller growth rate than in previous years, but suppliers are optimistic that the new iPhone 6 will renew interest in Apple's flagship smartphone and boost sales by a two-digit margin.
Huberty agrees. Though she says that the iPhone 6 will likely have a bill of materials by $20 to $30, she believes a modest price increase will not deter customers from upgrading from their previous iPhones or even switching over from Android.
"Current iPhone owners value the software, brand, ability to synchronize to other Apple devices, and the App Store's quality and size more than the average user, which drives Apple's high loyalty rating," Huberty explains. "The top criteria across all brands are longer battery life, software/operating system, and lower price, though current Apple users think price is of lesser importance."
