iPhone Assembler Foxconn Replaces iPhone Business Chief After Tumultuous Year in China: Report
Apple’s main manufacturing partner Foxconn has reportedly replaced the head of its iPhone business following what has been a tumultuous year in the iPhone assembly market in China.
According to a new report from Reuters news agency, Foxconn employees have confirmed that the company has named Jack Cheng to replace the long-serving iPhone business chief Young Liu. Mr. Liu had led the unit for a decade before his surprise replacement with Mr. Cheng last month.
The change in leadership has occurred amidst a period of significant turmoil in the iPhone assembly market in China. Chinese smartphone market competition has heated up throughout 2019, causing the market to become increasingly saturated and the margins for the iPhone assembly business to dwindle. The coronavirus outbreak in China has only exacerbated the situation.
In response to the challenging market conditions, Foxconn has taken a number of steps to adjust its strategy. The company has reportedly:
- Invested more heavily in automation. Foxconn has been increasing its investment in robotics and other automation technologies to enhance efficiency in iPhone assembly.
- Moved manufacturing out of China. In order to respond to the slowing Chinese smartphone market, Foxconn has been shifting production to other countries such as India and Mexico.
- Explored other opportunities outside of the iPhone assembly space. Foxconn has reportedly been investing in startup companies, expanding into industries such as renewable energy and e-commerce.
Despite the changes in leadership and strategy, Foxconn has expressed confidence that its iPhone business will remain strong. In a statement, Foxconn said: “Mr. Cheng is well-respected within Foxconn and brings with him a deep understanding of the iPhone business. We believe this transition will ensure that we are well-positioned to respond to the ever-changing demands of the global marketplace.”
Foxconn’s abrupt change in iPhone business leadership appears to have been driven by the challenging market conditions in China. The company has responded proactively by investing in automation and diversifying its operations, but only time will tell if these strategies will pay off in the long run. Foxconn, the Taiwanese assembler of Apple’s iPhones, has reportedly replaced its business chief for the iPhone division after a tumultuous year in which its production of the devices in mainland China has been hit by several delays due to the Covid-19 pandemic and trade tensions with the United States.
According to reports, the firm has named Li Choyue to take over the role from Jun Zhang after spending the past two years leading its local operations in the world’s largest mobile phone market. Li is the former vice president of Foxconn Technology Group’s Greater China operations and will report to the group’s chairman, Young Liu.
Zhang, who held the post since 2015, had been in charge of supporting sales and unifying the company’s operations across China, Vietnam, and other regions.
In the last few months, Foxconn’s Chinese production operations have been confronted by multiple delays causing Apple to postpone the launch of its iPhone 12 in the region. The trade conflict between the US and China has also put a strain on its ability to secure supply from abroad.
In the last year alone, Foxconn reported a significant drop in revenue from the iPhone segment, with sales in the first quarter of 2020 down 26.4 percent year-on-year and down 14.7 percent in the second quarter.
It remains to be seen if Foxconn’s internal reshuffle will have an immediate effect on its production operations and, ultimately, its financial results. However, with Li’s extensive expertise in the Chinese market, it is hoped that the firm may be able to strengthen its footing in mainland China and even capitalize on some of the opportunities arising from the US-China conflict.