Wednesday, 15 August 2018
News Tech

iPhone Maker Misses Out While Apple Investors Make 950% Return


It’s been one of the greatest money generating consumer products of all time. Yet those profits have barely spilled over to shareholders of the biggest builder of the iPhone.

Taiwan’s Hon Hai Precision Industry Co. has fallen 13 percent since the first iPhone was released in June 2007. Even when factoring in dividends, thetotal return since then amounts to 11 percent, compared with about 950 percent for Apple Inc.

The disparity shows Apple’s advantage in controlling the iPhone’s ecosphere from apps to the cloud, compared with the razor-thinmargins earned by hardware builders. Other former phone giants such as Nokia Oyj and BlackBerry Ltd. abandoned their manufacturing business, while companies such as HTC Corp. and Lenovo Group Ltd. limp on.

Hon Hai shares have plunged 34 percent since last June’s high amid concern thatdemand for the iPhone X is slowing at a time when Chinese competitors such as Huawei and Xiaomi are rolling out more premium phones. Hon Hai gets about half its revenue from Apple, which is down 10 percent from its March peak.

Still, the pain isn’t being shared equally by U.S company. Analysts are stillcounting on the first three months this year to have been Apple’s best second quarter ever with an average estimate for $61 billion in revenue.

— With assistance by Kristine Servando, and Sofia Horta E Costa



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