Apple demand aids Foxconn EMS sales

BEIJING: Foxconn Technology Group, the contract manufacturer for many of the world’s leading OEMs, will account for 50 percent of total EMS sales by 2011 as demand for its service surge from companies like Apple Inc.

Foxconn is stepping towards new horizons along with rising demand for Apple’s iPhone, iPad and Macintosh computers. According to the research firm iSuppli Corp, the demand hike for Foxconn’s services could add to the gulf between the company and its rivals. iSuppli says electronic business giants like Apple have made the ‘Foxconn’ success story possible.

With 54 percent sales growth from the last year at $17.2 billion, Foxconn finds its place ahead of competitors. Flexitronics International Ltd has posted only 6.4 percent increase to $5.9 billion for first quarter of this year. The company was once the world’s biggest EMS provider. iSuppli says the industry wide strength of digital consumer business and strong recovery of computing related products has made Foxconn’s revenue go up. Above all, the company showed 27.5 percent year-over-year revenue growth for the top ten EMS providers in the first quarter. This reveals its strong customer base.

Controversies are also hounding Foxconn. Suicide of some workers in China and hiked salaries in the region partly to count criticism of its business practices has earlier been reported. iSuppli predicts a fall in gross profit margins during the first quarter of this fiscal to 8.7 percent from 9.5 percent in the comparable quarter of 2009.