Apple plans China iPhone trade-in program with Foxconn

26 Mar 2015 | Author: | No comments yet »

Apple Inc. (NASDAQ:AAPL) Introducing Trade-In Program In China After U.S Aimed To Bolster Its Sales.

(Bloomberg) — Apple Inc. plans to introduce a trade-in program for iPhones in China, people familiar with the effort said, after a similar program bolstered sales in the U.S.Foxconn Technology Group isn’t satisfied with just making iPhones, and plans to break into the information security market through an upcoming joint venture.Apple chief executive Tim Cook (C-L) visiting the iPhone production line at the newly built Foxconn manufacturing facility at Zhengzhou Technology Park. Consumers will be able to take older iPhones to Apple stores in China for credit against the company’s products as soon as March 31, the people said, asking not to be identified as the details aren’t public.

On Thursday, the Taiwanese manufacturing giant announced it would set up in May a joint venture with Korea’s SK C&C, an IT services provider, to develop information security systems for the Chinese market. Foxconn and other foreign businesses in China are fighting to save tax breaks and other benefits promised by Chinese cities and provinces, as Beijing ramps up a campaign against big spending by local governments.

Bloomberg said Apple will work with Foxconn, the Taiwanese firm that manufactures its mobile devices, to accept older iPhones from customers in exchange for discounts on a newer model. The venture will be based at one of Foxconn’s factories in China, where it has hired over a million workers to assemble electronics for vendors that include Apple, Microsoft and Sony. As WSJ’s Gillian Wong and Lorraine Luk report: The crackdown could lessen the attractiveness of foreign investment in China, which totaled $119.6 billion in 2014. Foxconn will refurbish the older models and sell them to new customers online, via its own e-commerce sites and Alibaba’s Taobao marketplace, according to the report. Chief Executive Officer Tim Cook has said China is poised to overtake the U.S. as Apple’s biggest market, and he’s working to about double the number of stores in Greater China by the middle of next year.

Taiwan-based Foxconn, formally Hon Hai Precision Industry Co., makes Apple Inc.’s iPhone 6 at a sprawling factory in the central Chinese city that employs more than 200,000 people. Thursday’s deal with SK C&C will also involve the two companies working together on healthcare, finance and improving manufacturing processes, Foxconn said in a statement. Local governments are now balking at honoring previous tax breaks, the groups say, while local officials are seeking guidance from Beijing on other goodies like promises to sell land at a discount or waive social-insurance payments. That ranking was very different one year before, when Samsung (18.8 percent), Lenovo (13.2 percent) and Huawei (10.2 percent) had outsold Apple (7.4 percent) and Xiaomi (6.5 percent). Apple Inc. (AAPL)’s iPhone market share surged to 12.3% in China, in the final three months of last year, and it is in second place behind the domestic maker Xiaomi, according to report of IDC.

Business groups have complained that China uses its antimonopoly law to target foreign companies, though China says it has also stepped up enforcement against local companies. Foxconn will repair the devices if needed and then sell them through its e-commerce sites eFeihu and FLNet, and through Alibaba Group Holding Ltd.’s Taobao online store, one person said. Apple Inc. (NASDAQ:AAPL)’s stock on 25 March traded at beginning with a price of $126.71 and when day-trade ended the stock finally fell -2.61% to end at $123.38. While Apple doesn’t break out regional unit shipments, researcher IDC estimates iPhone sales, which previously were tepid in China, spiked 42 percent during the 2014 calendar year to 46.3 million.

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