Apple's largest supplier, Foxconn, has to pay a lot of costs. According to an internal company memo, it aims to cut 20 billion yuan (2.9 billion yuan) from its expense in 201
This is allegedly because it faces "a very difficult and competitive year" – although it do not expand exactly what this means.
Bloomberg suggests that some of this money comes from the part of Foxconn dedicated to Apple production. It says that:
"The iPhone business has to reduce spending by 6 billion yuan next year and the company plans to eliminate about 10 percent of non-technical staff, according to the memorandum. The company's expenses in the past 12 months are about NT Foxconn did not immediately comment. "
Like many vendors, Foxconn has been pushed, although Apple's revenue continues to grow. For example, Apple now conducts direct price negotiations for the screws and various non-key metal and plastic parts used on the devices. Previously, these were purchased directly by their contractors, such as Foxconn. The Foxconn Challenge
Foxconn has also been hit by falling demand for the new iPhones. A recent report says it recently stopped plans for additional production lines dedicated to the iPhone XR. It had prepared nearly 60 assembly lines for the iPhone XR, but was only completed with about 45 of them.
2018 marks Foxconns 30th anniversary. At a special event to celebrate the occasion, founder Terry Gou described how Foxconn plans to move on to create their own hardware as well as embrace software alternatives like cloud computing. This is about solving the problem of plateauing smartphone sales.
It is also working to open its first plants based in the United States.