TAIPEI (Reuters) – Apple AAPL.O supplier Foxconn 2317.TW forecast strong demand for the new iPhone 12 in the holiday quarter and stressed that it would continue investing in the United States as scheduled and is looking at making new products there.
Foxconn’s planned $10 billion investment in the U.S. state of Wisconsin did not create enough jobs in 2019 to earn tax credits, the state government said last month, the second year the company missed targets touted by President Donald Trump as a major economic win.
For many, the factory has become a symbol of failed promises in Midwestern states that were key to Trump’s 2016 election but flipped to Democrat Joe Biden last week. Trump is seeking some recounts.
Foxconn said on Thursday its investment plan did not depend on who the U.S. president was. It was, however, exploring the option of building a new production line there.
“We continue to push forward in Wisconsin as planned, but the product has to be in line with the market demand … there could be a change in what product we make there,” Chairman Liu Young-way said at an investor conference.
Possible new products include those related to servers, telecommunications and artificial intelligence, he later told reporters.
Foxconn initially sought to make advanced large-screen displays for TVs at the Wisconsin site. It later said it would build smaller liquid crystal display screens instead.
Foxconn, formally Hon Hai Precision Industry Co Ltd, reported near flat third-quarter profit on Thursday, beating market estimates amid firm demand for telecommuting devices amid a coronavirus-induced work-from-home trend.
It booked July-September net profit of T$30.8 billion ($1.08 billion), Reuters calculations showed based on nine-month figures, versus T$30.7 billion a year earlier.
That compared with the T$28.61 billion average of 13 analyst estimates compiled by Refinitiv.
Chief Financial Officer David Huang said third-quarter revenue fell 7% due to clients delaying product launches.
Still, Liu said Foxconn saw “stronger than expected” demand for both smartphones and servers, with strong shipments of Apple’s new iPhone 12 supporting revenue.
Analysts and Liu expect this trend to continue in the coming months. Foxconn is likely to assemble all premium models and 70% of other models, said analysts, including those from Taipei-based Fubon Research.
Foxconn expects consumer electronic product revenue to rise about 10% in the fourth quarter, as well as next year.
Consumer electronics, including smartphones, made up 41% of revenue in the third quarter, followed by devices for cloud computing at 28% and other computing products such as laptops at 24%.
Underscoring weak demand during the pandemic, global smartphone shipments fell 1.3% from a year earlier in the September quarter, data from researcher IDC showed.
Foxconn’s share price ended trade 0.4% higher ahead of the earnings release, versus a 0.3% fall in the broader market .TWII. It has fallen about 10% this year.
($1 = 28.5080 Taiwan dollars)
Reporting by Yimou Lee and Ben Blanchard; Editing by Christopher Cushing; Editing by Robert Birsel
Source:- Reuters Canada
Digital Technologies have a strong return on investment, survey says – JWN
Canada’s oil and gas industry says investing in digital oilfield technologies can generate a strong return on investment even in today’s difficult market, according to a survey of industry professionals conducted as part of the Daily Oil Bulletin’s 2020 Digital Oilfield Outlook Report.
The survey asked respondents to evaluate 11 key digital applications along three dimensions: return on investment, technology maturity, and the readiness for their organizations to adopt the technology. The applications represent how organizations use technology to deliver value.
At a time when many companies are in survival mode as they attempt to hang on until the pandemic-inspired collapse in demand for their products abates, return on investment takes on particular significance.
Evaporating cash flows have left many companies in no condition to make any investments, let alone those that don’t virtually guarantee positive short-term returns. Many survey respondents said the sense of risk-taking on new technologies – with the attitude they could fail fast and move on – has withered.
However, there was widespread recognition and consensus across industry groups (producers, midstream, OFS) and levels (CEO to analyst) that digital technologies in general have high return on investment with all 11 technology use cases believed to represent a return on investment compared to or higher than other uses of capital in the organization. This bodes well for digital oilfield technologies vying against other investment opportunities in difficult times – an indication they will pay for themselves more quickly than other forms of investment.
The use cases felt to deliver the greatest return on investment – Production Asset Optimization, Automated Production Asset Operations and Predictive Maintenance – play into that narrative for their ability to reliably cut costs and deliver efficiencies. As quickly maturing technologies, they can be delivered for relatively affordable investment with low risk.
Also of note was that Fleet Management, Remote Asset Monitoring and Field Productivity are amongst the most mature and best known, and have return on investment that is closest to other comparable uses of capital. They may have already produced considerable gains in recent years and be perceived to have reached a level of saturation that is more difficult to improve on. Conversely, Biometric Monitoring, at the bottom of the list, maybe seen as one of the least mature use cases from an industrial perspective and therefore considered a high investment risk in difficult times.
Attitudes toward the return on investment have shifted in the five years since the Daily Oil Bulletin’s first survey was conducted. In comparison to the results of the 2015 survey (in which some applications were not polled), there is much more confidence in return on investment from optimizing field workforces, with “remote” applications having seen the biggest jump in perceived return on investment. Of the eight comparable use cases, those that climbed the most in rank over the past five years were Remote Asset Operations, Remote Asset Inspection and Remote Asset Monitoring.
While it is a sign of shrinking workforces in the midst of a major downturn in the industry, it could also be an early indication of more to come as companies are forced to deal with the secondary crisis of the pandemic and the physical distancing that entails for employees. Indeed, “remote” has become a watchword in all sectors of the economy as workers have been forced to adjust to the new COVID-19 reality. The ability to remotely operate, inspect and monitor assets simplifies the physical distancing aspect of these activities even as it trims costs.
For more information, the Daily Oil Bulletin’s 2020 Digital Oilfield Outlook Report, sponsored by Amazon Web Services and Rackspace Technology, is available for download here.
Note: In terms of ROI, a score of three represents a return on investment comparable to other uses of capital, four is higher than other uses of capital, and five is much higher.
India Stymies Investment From Hong Kong Amid China Border Row – BNN
(Bloomberg) — India is subjecting foreign investment proposals from Hong Kong at par with China as part of a new policy that makes approval mandatory for plans from countries that share a land border, a person with the knowledge of the matter said.
Nearly 140 investment proposals valued at over $1.75 billion, mostly from China and Hong Kong — China’s special administrative region — have been put on hold pending scrutiny, the person said asking not to be identified citing rules on speaking to the media.
Amid a border stand off with China, the Indian government tightened rules for foreign direct investment from all nations sharing a land border, making scrutiny mandatory for such investments — a restriction that was earlier applicable only to Pakistan and Bangladesh.
The delays may complicate deal-making and impact the flow of capital from private equity firms and hedge funds, which often include investors domiciled in China or Hong Kong. This may starve Indian companies of investment in the midst of the pandemic-induced economic contraction.
The curbs also apply when the beneficial owner of the proposed investment is situated in any of India’s neighbors. A government panel constituted to approve these proposals is yet to decide on the rules including on beneficial ownership.
The trade and industry ministry spokesman didn’t immediately answer a call made to his mobile phone.
READ MORE: China Gained Ground on India During Bloody Summer in Himalayas
Tensions between the two giant Asian economies have been escalating since May. Twenty Indian soldiers and an unknown number of Chinese troops were killed in clashes along the Himalayan frontier earlier this year.
The military crisis is the worst since the two sides fought a war in 1962. India responded by banning Chinese apps, tightening visa rules for Chinese nationals and imposing curbs on companies from nations sharing a land border from bidding for government contracts.
Earlier last month, Foreign Minister Subrahmanyam Jaishankar had told Bloomberg News that trade with China can’t carry on in business-as-usual mode as long as there are unresolved issues along the border — a disputed 3,488-kilometer (2,167-mile) stretch known as the Line of Actual Control.
©2020 Bloomberg L.P.
Billionaire Bezos Backs Start-Up in Maiden Africa Investment – BNN
(Bloomberg) — Jeff Bezos agreed to back Africa-focused financial technology company, Chipper Cash, making it his first start-up investment on the continent.
The world’s richest man’s personal venture capital fund, Bezos Expeditions, supported the Series B funding led by Ribbit Capital, which raised $30 million for the San Fransisco-based company.
“Jeff Bezo’s backing of Chipper Cash will widen the company’s product suite through inclusion of more business payment solutions, crypto-currency trading options, and investment services,” the company said in an emailed statement.
Chipper Cash enables instant cross-border mobile money transfers in Africa and abroad and will use the funds for expansion into countries it will announce in 2021. The company has 3 million users on its platform across Ghana, Uganda, Kenya, Tanzania, Rwanda, Nigeria and South Africa, and processes an average of 80,000 transactions daily, according to the statement.
“We are responding to the demand from customers on our P2P platform who also have business enterprises,” Chipper Cash Chief Executive Officer Ham Serunjogi said in the statement.
Read more: Visa Partners With Payments Startup Chipper in African Expansion
©2020 Bloomberg L.P.
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