Foxconn, Pegatron to make big gains from new iPhone models in 2017
TAIPEI - KGI Investment has tapped Taiwan’s Foxconn Electronics and Pegatron Corporation as the two companies that would register major gains in 2017 from the new iPhone models.
The OLED iPhone, the 4.7-inch TFT-LCD iPhone and the 5.5-inch TFT-LCD iPhone are the three new models that Apple will be launching in 2017.
The local media has reported that Foxconn had a monopoly on the manufacturing of the OLED iPhone, receiving up to 90-95 per cent of all Apple’s orders.
Although Foxconn would not be producing the new 4.7-inch TFT-LCD iPhone, the company secured only 55 to 65 per cent of the manufacturing contracts for the new 5.5-inch TFT-LCD iPhone, a drop from 90 to 100 per cent in 2016.
KGI remained optimistic about Foxconn’s performance in 2017, given its 90-95 per cent monopoly on the production of the new OLED iPhone.
Apple is expected to release these three new phone models in the third quarter of 2017, thus possibly setting the market up for growth.
Currently, it is estimated that the OLED iPhone, the 4.7-inch TFT-LCD iPhone and the 5.5-inch TFT-LCD iPhone will constitute 50 to 55 per cent, 30 to 35 per cent, and 10 to 15 per cent, respectively, of Apple’s orders in 2017.
On Pegatron’s front, the company has secured sole rights to provide the EMS for the 4.7-inch TFT-LCD iPhone. Furthermore, in 2017, it will produce a small percentage of the OLED iPhones, an approximate estimate of roughly 5 to 10 per cent of the orders.
Earlier, last month, there were reports that Pegatron could secure 5 to 10 per cent of the orders for the 5.5-inch TFT-LCD iPhone.
Another Taiwanese company that has been thrown in the mix is Wistron. The company has reportedly secured 35 to 45 per cent of the manufacturing contracts for the 5.5-inch TFT-LCD iPhone.
With regard to the 5.5-inch TFT-LCD iPhone, KGI Investment stated that it would feature in an awkward place in the market. Given that this iPhone is not as slick or innovative design-wise as the OLED iPhone and that it is not as cheap as the 4.7-inch TFT-LCD iPhone, there are concerns regarding the model’s marketability. Hence, KGI Investment explained why the phone model comprised the least of Apple’s orders for 2017.
KGI Investment reported optimism regarding the stock performance of both Foxconn and Pegatron in the future. Both companies reported strong third-quarter performances, with Foxconn and Pegatron reporting a quarterly growth of 16.61 per cent and 38 per cent, respectively, compared to the second quarter.
KGI Investment expressed conservative optimism for Wistron regarding its stock performance in the future.
