Hon Hai expected to secure 70% of new iPhone orders: analyst
May 21, 2015, 12:00 am TWN
TAIPEI--Hon Hai Precision Industry Co. (鴻海), the world's largest contract electronics maker, is expected to secure 60 percent-70 percent of the orders placed by Apple Inc. to assemble the next generation of the iPhone, an analyst said Wednesday.
Kuo Ming-chi, an analyst with Taipei-based KGI Securities, said that as Hon Hai boasts a higher yield rate in assembling the iPhone, the Taiwanese manufacturer is expected to secure the majority of the orders from Apple.
Kuo said that Apple is expected to unveil the next iPhones in August, a month earlier than the market had widely anticipated.
The new devices are expected to hit store shelves in September and to serve as a driver of Hon Hai's shipments and earnings for the second half of this year, helping the company climb out of the slow season in the first half, the analyst said.
Kuo expected that the next generation of iPhones will be a 4.7-inch model and a 5.5-inch model like their two predecessors — the iPhone 6 and iPhone 6 Plus — adding that shipments of the 4.7-inch model are expected to account for about 66 percent of the total with the larger model accounting for the remainder.
The analyst said that the new iPhones will adopt force touch technology, which allows the user to use a forceful push as a separate input method from a tap. Such technology was first introduced on the trackpad for Apple's new MacBook.
In a research note, Kuo said the force touch technology "can enrich user experience due to more input methods and support of handwritten signatures, which is beneficial for expanding the commercial market."
In addition to assembling the new iPhones, Kuo said that Hon Hai is expected to serve as the sole assembler of the next generation of the iPad, which will be equipped with a 12.9-inch panel. Apple is likely to launch the new iPad in the fourth quarter of this year.
Over the weekend, Hon Hai reported better-than-expected results for the first quarter, in which its profit margin improved from the same period of last year on the back of solid demand for the iPhone 6 and iPhone 6 Plus.
The first-quarter results, along with the company's NT$4.3 in dividend payout proposal, led to shares of Hon Hai rising 5.69 percent in the first two sessions of this week before falling back 0.91 percent to close at NT$97.50 (US$3.20) on profit taking Wednesday.