Hon Hai, Cheng Uei Snap Up Apple's Order for iPhone Headphones

Taipei, Nov. 25, 2010 (CENS)--The Taiwan-based Hon Hai Precision Industry Co., Ltd., now the world's No. 1 EMS (electronics manufacturing service) provider, and Cheng Uei Precision Industry Co., Ltd., an adaptor and connector maker, have jointly snapped up Apple's contract orders for iPhone headphones from Japan's FOSTER, according to industry sources.

FOSTER has been the exclusive maker of iPhone headphones for a while. However, starting in 2011, part of headphones for iPhones will be supplied by the two Taiwanese electronic manufacturers, with Hon Hai making wires and assembling the device, and Cheng Uei producing cords, loudspeakers and control switch modules.

Market observers indicated that the switched orders, approximately worth as much as NT$5-10 billion, will bring about considerable growth momentum for Hon Hai and Cheng Uei’ sales in the future. iPhone headphones have been heavily demanded among consumers, partly because of iPhone's popularity, and partly because of iPhone headphones being compatible with iPad.

Sales of iPhone are estimated at between 48 million and 50 million units this year, and may double to 100 million units in 2011. In other words, over 100 million sets of iPhone headphones will be on demand then, surely granting the two Taiwanese firms huge business drives.

Noteworthily, Cheng Uei is expected to see its sales to Apple markedly surge 50% in 2011, because the firm will also supply iPad chargers and flexible substrates used in iPhone headphone control switches to the client in the year, in addition to the aforementioned headphone parts. In response to the rapidly growing business with Apple, Cheng Uei has kicked off output expansion in its factories in China.

After earning over NT$1 billion in net profits in the third quarter of this year, Cheng Uei is expected to score full-year EPS (earnings per share) of over NT$4 for the year. Securing closer business ties with Apple and Microsoft, the firm is estimated to post annual EPS of over NT$6 in 2011, noted institutional investors.