Reporter Shi Feiyue / Wen Bai Yang / tab
It is reported that Foxconn's Sharp has acquired Toshiba's PC business. Although Sharp China has not yet made an official response to this, Sharp has previously stated that it will acquire Toshiba’s personal computer (PC) business. This is Foxconn. Another cross-border acquisition in the field of consumer electronics is also an important step in the company's transformation. As the oldest brother in the foundry industry, Foxconn used the low cost of labor to gain a lot of success, but with the land With rising labor costs, the identity of OEMs is difficult to sustain. Although Foxconn has also been trying out business innovation in recent years, there has not been a business that has been able to tear down Foxconn's 'substitute factory' label.
The acquisition goes further
According to sources, Sharp's acquisition of Toshiba PC's entire transaction amounted to 40 million U.S. dollars, or approximately 260 million yuan. This is another Japanese company acquired by Foxconn in the consumer electronics field after Sharp. Earlier, Toshiba stated in a statement. The company is considering selling personal computer business and is negotiating with potential buyers, but when fashion does not have a concrete decision.
A reporter from Beijing Business Daily contacted Sharp. The company stated that it has not received any news in the country. Therefore, it does not understand the acquisition. As early as 2010, Sharp quit the computer market. The industry believes that the company is once again involved in computers. The field, just one of the transformation plans of the new owner Foxconn, Sharp will be deeply involved in the global notebook industry chain and ecosystem.
Toshiba has the title of 'Father of the Notebook' and once created the world's first notebook computer, giving up its own PC business. This scene is embarrassing. In 2011, Toshiba’s notebook shipments reached 17.5 million units, which was 8.8%. Global market share.
However, as the notebook gradually became saturated, Toshiba gradually lost in competition with competitors. In 2017, Toshiba's notebook shipments fell to less than 1 million units, and the market share fell to 0.6%. Toshiba's personal computer business as of 3 In the fiscal year of the month, sales were 167.3 billion yen and the loss was 9.6 billion yen. However, Toshiba’s notebooks have a mature brand and still have a certain influence on business computers, European markets, etc. Industry insiders believe that Foxconn sees Toshiba notebook high-quality brand image.
Foxconn is the world’s largest OEM manufacturer. Apart from supplying products for Apple, it also assembles personal computers for other global brands. However, Foxconn’s position is not prominent in the notebook OEM industry. In 2017, Foxconn’s notebooks were manufactured. The number of computers is 4.69 million units, which only accounts for 2.8% of the global notebook OEM.
Some research institutions pointed out that with the mastery of Toshiba and Sharp brands, Foxconn will gain a fast track to expand its influence in the notebook computer market. 'In the field of LCD panels, Foxconn has more abundant production capacity. However, Foxconn has difficulty using the advantages of LCD panels. To boost Toshiba’s notebook business. In the current cost structure of notebook computers, LCD screens only account for 10%-15% (far below the 60%-70% of LCD TVs).
OEM Golden Age has elapsed
As a well-known owner of a well-known foundry company, Gou Ting-ming should have the best understanding of what the so-called 'international OEM' means in creating profits and job opportunities.
It is reported that for every iPhone assembled, Foxconn's production line has a meager profit of less than US$4.5. Foxconn’s revenue in 2016 was NT$4.356 trillion (US$136.38 billion), which was a decrease of 2.81% year-on-year. This is also the company’s revenue since 1991. For the first time since the listing of the annual revenue decline.
In addition, the relationship between Foxconn and its employees seems to be not handled properly. A few days ago, it was reported that Foxconn Group's factory in Hengyang, Hunan Province produced a smart speaker for Amazon. The labor rights organization conducted a nine-month investigation and found that The factory has a long working time, low wages, insufficient training, etc. In addition, dispatch workers or temporary workers are also used in violation of Chinese labor laws.
Recently, Foxconn employees posted an “Open Letter to Foxconn employees” in the Shenzhen Foxconn factory area, stating that Foxconn had only paid 5% of the employee’s basic salary as a housing provident fund, causing employees to lose at least 1,000 yuan a year. The rent has skyrocketed and wages have stagnated.
In 1988, Gou founded a company called Foxconn Marine Precision Computer Plug-in Plant in Shenzhen. For more than 20 years, Foxconn quickly grew into the world's largest electronics manufacturer. In 2012, Foxconn’s total import and export volume was US$244.6 billion, accounting for China. The Mainland's 4.6%; 15 of its companies were selected as Top 200 Chinese Exporters. Ranked 43rd among Fortune 500 companies in the “Fortune” selection. Foxconn inherited high-tech companies from preferential policies and low labor costs. Wave after wave of orders, from laptops to Apple phones, from digital cameras to LED lighting.
However, the economic environment in China has changed, land and labor costs have continued to rise, and the pressure from foreign-oriented companies that rely on low-cost money has doubled. In the second half of 2008, Foxconn turned losses into profits, resulting in a post-tax loss of US$20.86 million. From 2010, Foxconn has accelerated the pace of investment in the Mainland. Plants in Chongqing, Chengdu, Ordos, Zhengzhou, and Langfang have either been put into use or started to be funded. At the same time, Foxconn plans to reduce the size of its employees in Shenzhen.
According to industry insiders, it can be said that Foxconn's achievements are cheap labor and there is no cheap labor. Foxconn will not develop to this day. From coastal to inland, every Foxconn shift is to cope with rising labor costs. However, Foxconn must face The reality is that the labor costs in the Mainland are increasing, and the cheap labor force has been hard to find.
The future is not easy
In recent years, Foxconn has been trying to innovate business, diversified its transformation, and even participated in the round of financing of Xiaopeng Automobile. In general, it is the transition from upstream to downstream. Up to now, there is not yet a business that can tear down Foxconn’s 'generation factory' label.
In the consumer electronics business, in May 2016, Microsoft sold the mobile phone division acquired from Nokia to Foxconn for US$350 million, and released several new machines in the past two years. At present, although Nokia’s quality technology is advanced, there is no Amazing performance.
The most impressive acquisition was the acquisition of Sharp in August 2016. Foxconn made a series of bold reforms after the acquisition. According to the plan, Aquos, Sharp, InFocus built high, medium and low-end brand platforms. Integral, with 'nobility not expensive' as the appeal, for different customers, different markets to make different segments, from strengthening the design, the use of manufacturing advantages, price promotions and other marketing methods, to expand the global market share of Sharp brand, which Foxconn brings its own brand bargaining power and additional benefits.
Fortunately, in the fiscal year ending in March of this year, Sharp achieved its first annual profit in four years. Industry observer Hong Shibin believes that Foxconn's resource advantages help Sharp reduce production costs, which in turn gives Sharp a cost advantage, and Foxconn in China. The sales network also played an active role in the sales of Sharp TV.
However, the above analysis pointed out that in the upstream supply chain of notebooks (including processors, memory chips, solid state drives, and traditional mechanical hard disks), Foxconn has few resources, so Foxconn would like to duplicate and integrate Sharp's computer business in Toshiba's computer business. Experience, will face enormous cost challenges.
Another important transformation direction of Foxconn is the Industrial Internet. At this year's 2nd World Conference on Smart Technology, Gou claimed a high-profile announcement that industrial Internet will be the outlet for Chinese industry and also the opportunity for the entire real economy. Foxconn Industrial Internet, a related company of Foxconn Group The joint stock company also officially listed in the domestic market this month.
For the Industrial Internet, one of the most popular current views is to use robots instead of manual labor. Currently, the annual cost of a Foxconn worker is about 50,000 yuan, while the acquisition cost of an ordinary robot arm is only about 100,000 yuan. Robot arms can generally replace 3-4 workers. On the surface, robotic applications are more cost-effective than workers. However, insiders pointed out that although the installation and general procedures of some precision parts can be replaced by robots, A large number of ordinary assembly jobs, the cost of the robot is obviously too high.
According to industry economic observer Liang Zhenpeng, the so-called industrial Internet, including the research and development of cutting-edge technologies, is still largely dependent on the OEM manufacturing industry. In this case, Foxconn cannot shake off the OEM label. Not only Foxconn. All foundry companies are under the banner of IPO financing. However, many times, the industrial Internet is only a concept. No matter what kind of smart terminals are produced, it is still mainly manufacturing. “The biggest problem with Foxconn is that there are no independent brands. Although there is Sharp support now, Sharp's main influence is television, and the influence of other products is very limited.